Long-term mortgage rates drop below 3%, but many buyers remain excluded from the hot market

This article is automatically translated. Please let us know if there are any errors.

Average long-term mortgage rates in the United States continue to decline this week.

The rate on a 15-year mortgage fell from 2.35% to 2.27%, with rates remaining historically low. If a homeowner is looking for a 30-year mortgage instead, these rates have dropped from 3.24% to 3.16%. In addition, the average benchmark mortgage rate fell from 3.09% last week to 2.98%.

Refinancing demand is also said to have increased by 7% last week.

Economists say the latest drop in mortgage rates can be attributed to yields on major Treasury bonds. When long-term bonds go down, bond prices usually end up going up. This drop can also lead to a drop in lending influence rates. However, experts are uncertain whether this trend will continue due to limited stocks and rising prices in the market.

Potential homeowners should also keep in mind the worsening inflation rate across the country. According to the Associated Press, this year’s Thanksgiving could be tough on families across the country. Prices for US consumers jumped 6.2 percent in October, the highest inflation rate in 30 years. In addition, prices jumped 0.9% from September to October. This new percentage of inflation could affect mortgage rates in the future.

For more Associated Press reporting, see below.

Around the same time last year, the rate stood at 2.84 percent.

Freddie Mac economists saw major Treasury bond yields fall to their lowest level since July.

Last week, the Federal Reserve announced that it would keep its main borrowing rate close to zero, but that it would start cutting back the extraordinary stimulus it has provided since the coronavirus pandemic erupted in the United States. last year. The Fed said it would start cutting its $ 120 billion monthly bond purchases in the coming weeks, from $ 15 billion per month, citing an improving economy and growing concern about the persistence of a peak in inflation.

The central bank’s action comes as higher prices for just about everything – food, rent, heating oil, cars and other basic necessities – weighed on households. One of the main factors fueling the price spike has been strong consumer demand, which has been hit by persistent supply shortages due to COVID-related plant closures in China, Vietnam and other parts of the world. other foreign manufacturers.

Inflation poses a political threat to the Biden administration and Congressional Democrats, and intensifies pressure on the Fed as it considers how quickly to withdraw its efforts to stimulate the economy.

This article is automatically translated. Please let us know if there are any errors.

–