81% as of December 29th, 2020. This is due to a combination of factors, including government monetary policy, investors buying bonds, economic uncertainty, and an influx of buyers looking to take advantage of low rates.
The Federal Reserve has taken many steps to stimulate the economy during the pandemic by cutting interest rates for federal funds and purchasing bonds backed by mortgages. These actions have caused yields to drop on long-term bonds such as 10-year Treasuries, which is a large driver of mortgage rates. The demand for bonds from investors have also increased as they look to purchase securities that are seen as relatively safe investments during times of economic uncertainty.
At the same time, there has been an increased demand for mortgages due to historically low-interest rates, which make homeownership more affordable. This has been reflected in an increase in mortgage applications as buyers take advantage of the current market conditions. Recent Home Purchase sentiment Index findings have reported an increase in activity despite rising concern about the coronavirus, indicating a strong confidence among Americans looking to purchase homes despite the pandemic.
Mortgage rates will likely remain low into 2021, as economists predict that the Federal Reserve will continue to support the economy with low-interest rates. However, there is still a degree of uncertainty surrounding the strength of the recovery and the potential for additional stimulus packages, which can affect future mortgage rates. For now, prospective buyers will be able to take advantage of these historically low rates, allowing them to find an affordable mortgage to finance their new home.
In summary, mortgage rates have remained low as of December 29th, 2020, due to a combination of government policies, an influx of buyers looking to take advantage of low rates, and increased demand from investors for safer investments during times of economic uncertainty. Home Purchase sentiment Index findings have reported that even amidst rising concern surrounding the coronavirus, there is still a confidence among Americans looking to purchase homes, creating additional demand. Mortgage rates are likely to remain low into 2021 as economists predict that the Federal Reserve will continue to support the economy with low-interest rates; however, there is still a degree of uncertainty in regards to the strength of the recovery and the potential for additional stimulus packages, which can affect future mortgage rates. In the meantime, prospects buyers can take advantage of the current low rates to finance their new home.
This article was contributed on Dec 09, 2023
