According to a weekly survey by Freddie Mac, the interest rate on a 30-year fixed rate mortgage, now 2.88%, hit an all-time low dating back to the survey’s start in 1971.
Right now, housing is a bright spot in the economy. Record-breaking low mortgage rates suggest the Federal Reserve’s accommodative policy is working as intended to keep the cost of debt low for borrowers and stimulate demand. Indeed, refinancing activity has been elevated all year, with a noticeable spike in early March when rates first fell.
Even lower rates today should help spur more activity by freeing up spending power at the household level. And because rates are expected to stay lower for longer, they should provide a robust tailwind to housing and consumption once the U.S. economy can safely and fully reopen.
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