The average U.S. mortgage rate for a 30-year fixed loan is 2.9% this week, up from 2.87% last week, Freddie Mac said in a report on Thursday. It’s the ninth consecutive week the rate has been below 3%.
The average rate for the less-popular 15-year mortgage was 2.4%, rising from last week’s record low of 2.35%, the mortgage giant said.
Sub-3% rates are boosting real estate demand and fueling bidding wars. U.S. home prices jumped more than 2% between May and July, the largest two-month gain on record, as Americans emerging from COVID-19 lockdowns bought real estate, the Federal Housing Finance Agency said in a Wednesday report.
“Historically low interest rates are the primary driver behind the strength in housing demand that we’ve seen in recent months, and that has led housing to be a bright spot for the overall economy,” Robert Dietz, chief economist of the National Association of Home Builders, said in an interview.
Rates started tumbling after the Federal Reserve committed to buying mortgage-backed securities in March to keep credit flowing amid the worst pandemic in more than a century. Because of that, the average U.S. rate for a 30-year fixed mortgage, as measured by Freddie Mac, has hit new lows nine times since COVID-19 first started spreading in America.
Sales of existing homes rose to a 14-year high of 6 million at an annualized pace in August, the National Association of Realtors said in a report on Tuesday.
Combined sales of single-family houses, townhomes, condominiums and cooperatively owned apartments rose 2.4% from July, according to the report. Compared to a year ago, last month’s sales were 11% higher, NAR said.
The median existing-home price last month was $310,600, up 11.4% year over year, and prices rose in every region, according to NAR.