Mortgage rates remain historic

Miniature wooden houses and a red arrow down. The concept of falling mortgage rates.
Andrii Yalanskyi / Shutterstock

Mortgage rates have ticked up in the widely followed weekly survey from mortgage giant Freddie Mac. After making history last week by falling below 3% for the first time — to 2.98% — 30-year fixed mortgage rates this week are averaging 3.01% in the nearly 50-year old study.

That's still far below last year at this time, when rates stood at an average 3.75%. The survey rates come with an average 0.8 point.

Meanwhile, mortgage rates are continuing to plummet in a separate survey, from Mortgage News Daily. On Thursday, it put 30-year mortgage rates at a jaw-dropping new record low: a mere 2.87%.

"Psychologically, mortgage rates below 3% are a big deal. Financially, they're a huge deal," says Green.

Borrowers can now get a loan for a typical home that costs $125 less per month than a mortgage at last year's rates, Realtor.com has reported.

More than 16 million homeowners can refinance, cut their rates by at least three-quarters of a point (maybe from 3.75% down to 3%) and save an average $283 a month, according to a study from mortgage data firm Black Knight.

Use the mortgage calculator below to get a look at the low monthly payment that's possible with one of today's bargain-bin mortgage rates:

Can rates go lower? Maybe, but don't wait

Surprised young couple feeling amazed with online mortgage rates.
fizkes / Shutterstock

Mortgage rates have plummeted as COVID-19 has prompted nervous investors to shift money into Treasury bonds, which are seen as a safe haven in uncertain times. The growing demand for bonds has pushed up their prices and gutted their interest rates — which set the pace for mortgage rates.

Bond rates, or yields, had been falling much faster than mortgage rates, but now the two have caught up and are moving more in sync. So, "mortgage rates have more or less exhausted their ability to move lower," says Matthew Graham, chief operating officer of Mortgage News Daily.

But Mark Fleming, chief economist with the title insurance and real estate services firm First American, says rates could fall to 2.8% or even lower.

"There’s a floor there, around probably 2.5%. We’re just not going to go much below that because people get paid for credit risk and other things out of that mortgage rate," Fleming told Yahoo Finance.

Negative interest rates from the Federal Reserve could push mortgage rates much, much lower, but the Fed has said it's not going to go there.

So for now, there's a possibility that today's astonishingly low mortgage rates could get a bit better, but experts say don't sit around if you're thinking of buying a home or refinancing.

"There's no rush to lock today's rates but there's also no reason to wait. Take advantage of the opportunity in front of you," says Green, of Homebuyer.

That means getting mortgage rate quotes from several lenders and comparing them — to find the best deal you qualify for.

Other mortgage rates this week

Upscale houses on a suburban street in the USA
Dan Thornberg / Shutterstock

The new Freddie Mac survey, released Thursday, shows rates on other popular types of mortgages have gone up this week.

The average for a 15-year fixed-rate mortgage has jumped to 2.54%, from 2.48% last week. Fifteen-year mortgages are a popular choice for refinance loans and are much cheaper than they were last year at this time, when the average was 3.18%.

Rates on 5/1 adjustable-rate mortgages, or "ARMS," are higher for the third straight week. Those loans have rates that are fixed for five years and then can adjust up or down every year, following the course of a benchmark interest rate like the prime rate.

ARMs are currently being offered at starter rates averaging 3.09%, up slightly from last week's 3.06%. At this time in 2019, the typical initial rate on those mortgages was 3.47%.

Once you're satisfied with your mortgage, give your homeowners insurance some attention. Are you paying too much? Go online and compare home insurance quotes, to get the right coverage at the best possible price.

Take a look at today's top mortgage rates where you are:

About the Author

Doug Whiteman

Doug Whiteman

Editor-in-Chief

Doug Whiteman is the editor-in-chief of MoneyWise. He has been quoted by The Wall Street Journal, USA Today and CNBC.com and has been interviewed on Fox Business, CBS Radio and the syndicated TV show "First Business."

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