In a coronavirus-created environment of severe inventory shortages and rising prices, home shoppers do have one advantage in the form of extremely low interest rates. Yet, while propitious today, the latter bear repercussions for the U.S. housing market for years to come.
According to mortgage buyer Freddie Mac, the interest rate on a 30-year home loan was 3.24% on Thursday, about a whole percentage point lower than a year ago. Even before the Covid-19 pandemic, rates have been sliding in response to market forces and Federal Reserve policies, previously aimed at keeping the U.S. economy chugging during its longest expansionary period.
And, mortgage rates could slide even further down. Home listing site Realtor.com anticipates them to drop below 3% later this year. Earlier this month, United Wholesale Mortgage announced a loan program with a 2.5% rate for both purchase mortgages and refinances.
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https://www.forbes.com/sites/dimawilliams/2020/05/22/low-mortgage-rates-benefit-home-buyers-but-not-without-housing-market-repercussions/#1a8561151125
