Mortgage rates have continued to drop for several months, contributing to a red-hot housing market with buyers hoping to take advantage of the low rates. A recent survey from Freddie Mac shows rates have hit a new record low.
“The housing market continues to surge higher and support an otherwise stagnant economy that has lost momentum in the last couple of months,” Sam Khater, Freddie Mac’s Chief Economist said in the survey announcement. “Mortgage rates are at record lows and pushing many prospective homebuyers off the sidelines and into the market. Homebuyer sentiment is sanguine and purchase demand shows no real signs of waning at all heading into next year.”
According to the latest survey, the 30-year fixed-rate mortgage averaged 2.67% “with an average 0.7 point for the week ending December 17, 2020.” This is the lowest mortgage rate ever recorded in the history of the survey, which started back in 1971.
This latest 30-year fixed-rate mortgage is a decrease from last week when it averaged 2.71%. The 30-year fixed-rate mortgage averaged 3.73% during this same week last year.
Meanwhile, this week’s 15-year fixed-rate mortgage averaged 2.21% and had an average 0.6 point. This is another decline from the previous week when it averaged 2.26%. During this time in 2019, the 15-year fixed-rate mortgage averaged 3.19%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.79% with an average 0.3 point, which is the same as it was the prior week. During this same week last year, the 5-year ARM averaged 3.36%.
“Low rates are one key factor contributing to the buying frenzy we've observed in the housing market,” Realtor.com’s Chief Economist, Danielle Hale, said. “Buyers with a keen eye on getting a home this holiday season are likely to struggle both to find a house that checks all the boxes and to win in a competitive market. Despite these challenges, soaring buyer demand is keeping home sales at their highest pace in more than 15 years."