The Fed’s 3 March rate cut has dropped U.S. mortgage interest rates to historic lows just as real estate’s prime selling season begins.
The average rate on a 30-year fixed mortgage has fallen from 3.45 percent to the never-before-seen 3.29, according to lender Freddie Mac.
Mortgage rates are closely linked to those of 10-year Treasury notes, which fell below 1 percent after the Fed’s move.
Real estate agents welcomed the lower rates, hoping they will counteract fears that potential buyers might have about venturing into strangers’ houses during the coronavirus epidemic.
The lower rates also may help to revive home sales, which fell in January after reaching 2019’s high mark in December.
The drop may indicate that cheap mortgages aren’t enough to lure buyers into a market in which home prices are rising due to a limited supply of houses for sale.
The low rates are expected to continue to fuel a boom in mortgage refinancing, which boosted 2019’s number of new mortgage loans to its highest level since 2006.
The number of refinancing applications rose 26 percent during the last week of February, triple the number filed during the same period in 2019.
JP Morgan Chase has suspended a campaign recruiting refinancing customers because so many people were applying.
TREND FORECAST: Should the COVID-19 panic continue to sink equities and economies, record low mortgage rates will not stop a global real estate meltdown, which will dramatically crash prices in markets that have sharply spiked following the Panic of ’08.
