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Published: Jul 21, 2020 4 min read

The number of mortgages in forbearance dropped for the fifth straight week. Concerns remain about how a resurgence of COVID-19 and the end of enhanced unemployment benefits could affect homeowners in the near future.

According to the Mortgage Bankers Association, the share of paused loans decreased to 7.80% for the week ending July 12 from 8.18% a week earlier.

"The share of loans in forbearance dropped to its lowest level in over two months, driven by an increase in the pace of exits as more homeowners have been able to get back to work," said Mike Fratantoni, MBA's chief economist. "The pace of new forbearance requests remains quite low compared to earlier in the crisis, but we are watching carefully for any increases due to either the pick-up in COVID-19 cases or the cessation of enhanced unemployment insurance benefits at the end of this month."

The MBA estimates that about 3.9 million homeowners are in forbearance plans. Of those homeowners still in forbearance, about half are in extensions of their original terms while the other half is in the initial phase of the plan.

Average Mortgage Rates Today

Mortgage rates broke the 3% barrier on Thursday, the lowest rate recorded in 50 years of Freddie Mac's interest rate survey. For the week ending July 16, the average interest rate for a 30-year fixed-rate mortgage set a new record low of 2.98% with 0.7 points paid, according to Freddie Mac. That's 0.05 percentage points below the previous low of 3.07%, set a week earlier.

The average rate for a 15-year fixed-rate mortgage was 2.48% with 0.7 points paid, down 0.03 percentage points from the previous week, while the average rate on a 5-year adjustable-rate mortgage increased to 3.06% with 0.3 points paid.