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A sign advertising home loan rates for purchase or refinancing at a Bank of America in New York.
Scott Mlyn | CNBC
The average rate on the popular 30-year fixed mortgage just fell to 3.09%, a record low, according to Mortgage News Daily.
A weaker-than-expected read on April’s coronavirus-affected retail sales released Friday contributed to the decline, as investors moved into the relative safety of the bond market, pushing yields down. Mortgage rates loosely follow the yield on the 10-year Treasury.
Mortgage rates are not an exact science, so there are some lenders now even lower, offering 3% and even 2.75%-2.875% for perfect scenarios. There are also lenders remaining at higher rates.
“Not every lender is there, though, and any scenarios where the buyer has a less-than-perfect profile may not even be close to all-time lows,” said Matthew Graham, chief operating officer of Mortgage News Daily. “Lenders are increasing fees for riskier borrowers due to the economic uncertainties brought on by the coronavirus and the rising number of borrowers struggling to make their monthly payments.”
There are now close to 4.7 million borrowers in mortgage forbearance programs, mostly in government-backed loans, according to Black Knight, a mortgage data and analytics firm. Those borrowers can delay monthly payments for at least three months and as long as a year, but the payments do have to made at a future date.
Low mortgage rates are contributing to a faster-than-expected recovery in homebuyer demand. As states reopen, buyers are heading back to open houses. Others are stepping up their virtual shopping. Both real estate agents as well as homebuilders have reported higher interest from buyers in just the last two or three weeks.