WASHINGTON (AP) — U.S. long-term mortgage rates dropped this week to a record low for the 16th time in 2020, reflecting an economy hard hit by the coronavirus pandemic.
Mortgage giant Freddie Mac said Thursday that the average rate on the benchmark 30-year fixed-rate home loan slipped to a record low 2.66% from 2.67% last week. A year ago, it stood at 3.74%
The average rate on 15-year fixed-rate loans, popular among homeowners seeking to refinance their mortgages, dipped 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 at 3.45%.
Helped by rock-bottom rates, the housing market has been a source of strength in an economy pounded by the coronavirus outbreak. The Federal Reserve has pushed the interest rate it controls to zero in an effort to help the economy rebound from a springtime shutdown.
But home sales have been stalled by a lack of homes on the market. On Wednesday, the Commerce Department reported that sales of new single-family homes sank 11% from October to November, though purchases remain up nearly 21% from a year ago.
“Moving into 2021, we expect rates to hold steady but the key driver in the near term will be the trajectory of the COVID-19 pandemic and the execution of the vaccine,” said Freddie Mac chief economist Sam Khater.