The average 30-year fixed mortgage fell to 2.98% in the week through Thursday, according to mortgage-finance agency Freddie Mac, the lowest reading in its 50 years of tabulating the data.
This represents the third straight week and the seventh week this year that the rate on the most popular U.S. home loan has hit a record low.
That’s a reflection, of course, of the plunge in bond yields amid the coronavirus pandemic and of the Federal Reserve’s reduction of the federal funds rate to a minuscule zero to 0.25%.
The 10-year Treasury yield hit an all-time nadir of 0.3% in March and now stands at 0.61%, down from 2.12% a year ago.
The average rate on the 30-year mortgage stood at 3.72% at the beginning of the year and 3.81% a year ago, according to Freddie Mac.
Existing home sales, which account for more than 90% of total home sales, dropped 9.7% in May from April, according to the National Association of Realtors. Sales slid 26.6% from May 2019, the largest annual decrease since February 2008.
But other data have shown the housing market is coming back, Bloomberg reports. Home-purchase loan applications have risen, for example.
Total mortgage application volume rose 5.1% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally-adjusted index.
“Just looking at the housing sector itself, it looks to be a V-shaped recovery,” Lawrence Yun, chief economist for the National Association of Realtor, told reporters last month. “For the rest of the economy, it may not be a V-shape.”