The coronavirus continues to have the U.S. economy in a stranglehold. But those looking to buy a home or refinance an existing mortgage got some good news Thursday. Mortgage rates hit a new all-time low.
The average interest rate for a 30-year-fixed rate mortgage hit 3.23%, with 0.7 points paid, for the week ending April 30, according to Freddie Mac. That's down 0.10 percentage points from 3.33% last week and a hair below the previous all-time low of 3.29% set earlier this year in March.
The rate on 15-year fixed-rate mortgages matched its March low of 2.77%. Interest rates on five-year adjustable-rate mortgages fell to 3.14% from 3.28%.
Interest rates have decreased sharply since the beginning of the year, as fears of the coronavirus have sent investors rushing to purchase safe-haven assets like Treasury bonds, and the Federal Reserve cut short-term interest rates to close to zero. Mortgage rates are largely pegged to 10-year Treasury bonds.
While most mortgage activity has centered around refinancing, Freddie Mac credits the low rates with improving home purchase activity in recent weeks. Some of the states hardest hit by the virus, such as California and New York, saw recent increases in home purchase activity after weeks of decline.
Nationally, applications for home purchase loans increased 12% for the week ended April 24, according to the Mortgage Bankers Association. The increase in purchase activity could be a signal of an upturn in the spring buying season, which has been delayed by the spread of COVID-19, the trade group said.
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