The ultra-low mortgage rates have helped boost home sales activity to the highest level since 2006.
The 30-year fixed-rate mortgage rate averaged 2.71% this week, holding at the all-time low first set last week, Freddie Mac reported.
The ultra-low mortgage rates are making homebuying more attractive and boosting sales activity to the highest level since 2006, economists said at the National Association of REALTORS®’ virtual Real Estate Forecast Summit on Thursday. While home prices are rising annually by double-digit percentages, mortgage payments remain more affordable due to low mortgage rates.
Home prices have jumped 16% compared to a year earlier, but monthly mortgage payments with 30-year fixed-rate mortgages have increased by only $10. Also, the average American is earning about $380 more per month compared to a year earlier, notes NAR researcher Nadia Evangelou at the association’s Economists’ Outlook blog.
Freddie Mac reports the following national averages with mortgage rates for the week ending Dec. 10:
- 30-year fixed-rate mortgages: averaged 2.71%, with an average 0.7 point, unchanged from last week. Last year at this time, 30-year rates averaged 3.73%.
- 15-year fixed-rate mortgages: averaged 2.26%, with an average 0.6 point, also unchanged from last week. A year ago, 15-year rates averaged 3.19%.
- 5-year hybrid adjustable-rate mortgages: averaged 2.79%, with an average 0.3 point, falling from last week’s 2.86% average. A year ago, 5-year ARMs averaged 3.36%.
Freddie Mac reports average points along with commitment rates to better reflect the total upfront cost of obtaining a mortgage.
Source: Freddie Mac and “Instant Reaction: Mortgage Rates, December 10, 2020,” National Association of REALTORS® Economists’ Outlook blog (Dec. 10, 2020)