US long-term mortgage rates fell to a record high for the 16th time in 2020 this week, reflecting a heavily affected economy by the coronavirus pandemic
Mortgage giant Freddie Mac said on Thursday that the average rate on a 30-year home loan with fixed rates fell to a record 2.66% from 2.67% last week. A year ago, it amounted to 3.74%
The average rate of 15-year fixed-rate loans, popular with homeowners looking to refinance their mortgages, has fallen to 2.19% from 2.21%. A year ago, it was 3.19%.
The 5-year adjustable rate mortgage was unchanged this week at 2.79%. A year ago, it was 3.45%.
Aided by lower rates, the real estate market has been a source of strength in an economy hit by the coronavirus outbreak. The Federal Reserve has pushed the interest rate it controls to zero in an effort to help the economy recover from the close of spring.
But home sales have been blocked by a lack of homes on the market. On Wednesday, the Commerce Department reported that sales of new single-family homes fell 11 percent from October to November, although purchases remain nearly 21 percent from a year ago.
“By 2021, we expect rates to remain stable, but the main short-term determinant will be the trajectory of the COVID-19 pandemic and the execution of the vaccine,” said Sam Khater, chief economist at Freddie Mac.