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US mortgage rates slip to a record low 3.03% for 30-year loans

Business Insider logo Business Insider 7/9/2020 insider@insider.com (Carmen Reinicke)
a sign on the side of a building: FREDERIC J. BROWN/AFP via Getty Images © FREDERIC J. BROWN/AFP via Getty Images FREDERIC J. BROWN/AFP via Getty Images
  • Freddie Mac said on Thursday that the popular 30-year fixed-rate mortgage averaged 3.03%, the lowest in the series dating back to 1971.
  • It's the sixth time US mortgage rates have fallen to a record low since March, when the coronavirus pandemic led to a market meltdown.
  • Still, there are risks ahead. "It remains to be seen whether the demand will continue if COVID cases rise to the point that it hinders economic growth," said Sam Khater, Freddie Mac's chief economist.
  • Read more on Business Insider.

US mortgage rates have fallen again, notching a sixth record low since March, when the coronavirus pandemic roiled global markets.

Freddie Mac said on Thursday that the popular 30-year fixed-rate mortgage averaged 3.03%, the lowest in the series dating back to 1971. The previous record, 3.07%, held for about one week.

Mortgage rates, which loosely take their cues from the 10-year US Treasury bond, slumped as investors fled to safety in the early days of the pandemic market rout in March. Since then, rates have stayed low as the Federal Reserve has held its benchmark interest rate near zero and snapped up mortgage bonds as part of its economic stimulus efforts.

Read more: Ed Hyman was named Wall Street's best economist 39 times and called the tech bubble. He outlines 3 market drivers that are aligning perfectly for investors looking to capitalize on coronavirus chaos.

The low rates have been a catalyst for homebuyer demand, which has surged in recent weeks, indicating a swift recovery from the shock of the pandemic and the market halt as people were told to shelter in place.

The Mortgage Bankers Association said that last week mortgage applications ticked up 2.2% and purchase demand was 33% higher than it was a year ago.

While the housing market has seen a rebound, there are still risks ahead, especially as the US grapples with surging coronavirus cases. Some states have paused or rolled back reopening plans to deal with spikes in cases, which could derail the economic recovery.

"It remains to be seen whether the demand will continue if COVID cases rise to the point that it hinders economic growth," said Sam Khater, Freddie Mac's chief economist.

Read more: GOLDMAN SACHS: Wall Street is bracing for a historically wild stock market as the presidential election nears. Here's a surprising yet simple strategy for protecting your portfolio — regardless of outcome.

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