Mortgage rates hit 10th record low of 2020, further fueling the US housing market’s boom

For the 10th time this year, mortgage rates hit a record low.

The average 30-year fixed mortgage rate fell to 2.81% from 2.87% last week, Freddie Mac said in a Thursday release. The reading is the lowest in data going back nearly 50 years. The last record low was 2.86% seen in early September.

The streak of new mortgage-rate lows is unlikely to stop anytime soon. The Federal Reserve indicated in September that its benchmark interest rate will likely remain near zero through 2024, in turn limiting a climb in home loan rates.

The historically low borrowing costs have fueled a housing market surge despite the broader economic turmoil. Sales of new homes have rallied, so much so that just 3.3 months of supply is left should the pace hold steady. That’s the shortest period in data going back to 1963, according to the Census Bureau.

Existing home sales have trended similarly. Though the housing market presents a bright spot in the struggling US economy, the supply shortage has lifted prices and may soon force some to delay homeownership.

“Many people are benefiting as refinance activity remains strong. However, it’s important to remember that not all people are able to take advantage of low rates given the effects of the pandemic,” Sam Khater, Freddie Mac’s chief economist, said in the release.

Article by Ben Winck on markets.businessinsider.com