Mortgage Rates Drop as COVID-19 Cases Rise Nationwide
March 26, 2020
Freddie Mac has reported that 30-year fixed-rate mortgage (FRM) averaged 3.50 percent, with an average 0.7 point for the week ending March 26, 2020, down from last week when it averaged 3.65 percent. A year ago at this time, the 30-year FRM averaged 4.06 percent.
News of the dip in rates comes as the death toll in COVID-19 cases rises to more than 1,000 nationwide, as the virus had expanded its presence from several isolated areas of Washington State, New York and California, to all 50 states. Fear of contact with others and mandatory "stay-in-place" orders has considerably slowed the housing market as, mortgage applications decreased 29.4 percent week-over-week according to the Mortgage Bankers Association (MBA).
“The Federal Reserve’s swift and significant efforts to stabilize the market were much needed and helped mortgage rates drop for the first time in three weeks,” said Sam Khater, Freddie Mac’s chief economist. “Similar to other segments of the economy, real estate demand is softening. However, the combination of the Fed’s actions and pending economic stimulus will provide substantial support to the mortgage markets.”
Also last week, the 15-year fixed-rate mortgage averaged 2.92 percent with an average 0.6 point, down from last week when it averaged 3.06 percent. A year ago at this time, the 15-year FRM averaged 3.57 percent. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.34 percent with an average 0.3 point, up from last week when it averaged 3.11 percent. A year ago at this time, the five-year ARM averaged 3.75 percent.
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