Mortgage Rates Lowest on Record
Last week, the average rate on the 30-year fixed rate mortgage (FRM) fell to 2.98%. This is the lowest level in almost 50 years of recorded rates. With the cost of borrowing being so cheap, now may be the perfect time to refinance an existing mortgage or consider a new home purchase. Contacting a mortgage lender or originator could be of benefit to improving your financial position. How did we arrive at such low rates? As you know, the coronavirus pandemic rocked the economy. With a dark economic forecast, the Federal Reserve had to aggressively respond. One key action taken by the Federal Reserve was to lower interest rates. Investors also contributed to reducing rates by fleeing risk assets and investing in safe-haven assets, such as Treasuries. Remember, when an investment is in demand, its price moves higher. For bonds, as prices rise, yields or rates move lower. This is further illustrated by looking at the most popular debt instrument, the 10-year Treasury. The 10-