Mortgage interest rates fell below 3% yesterday for the first time in history, according to Freddie Mac. The 15-year fixed mortgage rate fell to 2.48% and the 30-year fixed rate fell to 2.98%. The average rate on a 30-year fixed mortgage fell to 2.98%, mortgage finance giant Freddie Mac said Thursday, its lowest level in nearly 50 years of record-keeping. This is the third consecutive week and the seventh time this year that rates on the most popular mortgage loan in the United States have reached a new low.
The 30-year fixed mortgage rate peaked at 18.4 percent in October 1981, according to Freddie Mac, dropping to 9 percent in 1986 and closing the decade at 9.78 percent. Mortgage rate forecasts predict a continued increase by the end of the year, which some attribute to inflation driven by temporary supply chain problems. First-time homebuyers should keep in mind that the housing market is extremely competitive right now, and that home prices are at all-time highs, partly driven by low mortgage rates that have existed for more than a year. Look for the lowest possible rate and charges based on your credit and finances, and be sure to set your rate.
While each lender has different standards, having a down payment of at least 20% and a credit score of 700 to 740 will generally allow you to get the lowest mortgage rate. While the interest rate is usually higher than the rates offered on 15-year mortgages, monthly payments are also lower, making this a more feasible option for most homebuyers. Monetary policies set by the Federal Reserve can also have a significant impact on mortgage rates, even if you don't directly set them. The lowest historical mortgage rates in history for 30-year FRMs were more recent than you might think.
Keep in mind that the annual percentage rate (APR) announced by lenders will be slightly higher than the advertised interest rate. Overall, lower mortgage rates fuel demand among homebuyers and can increase a person's purchasing power. Amid the pandemic, fearful investors were drawn to safer products, such as Treasury bonds and mortgages, which drove yields down and Looking at all of Freddie Mac's available historical mortgage rate data, a trend becomes evident. That's why it's important to pay attention to the economic impact of COVID variants when it comes to understanding mortgage rate trends.
