Rates are going down as fears of a coronavirus pandemic have had investors shoveling their money out of stocks and into Treasury bonds, for safer returns.
Mortgage rates return to 3-year lows
After inching higher for a couple of weeks, the benchmark 30-year fixed mortgage rate fell back to an average 3.45% for the week ending Feb. 27, from 3.49% the previous week, mortgage giant Freddie Mac reports. The rates in the survey come with an average 0.7 point.
Mortgage rates tend to mimic the interest on 10-year Treasury bonds, which has been hitting record lows as investors crowd on board Treasuries out of fear of what the coronavirus could do to the economy.
Once again, mortgage rates are closing in on their all-time low in the nearly 50-year-old Freddie Mac survey. In November 2012, 30-year mortgage rates went all the way down to an average 3.31%.
And this month's rates remain the lowest ever for February, according to a MoneySure.com review of Freddie Mac data.
Use the calculator below to see how affordable your monthly mortgage payment can be with one of today's best rates.
Will mortgage rates stay down?
Low rates and a mild winter in most of the country have made this the busiest pre-spring housing market in about 15 years, says Corey Burr, senior vice president with Sotheby's International Realty in Chevy Chase, Maryland. He's hopeful rates will remain low and sales will stay strong.
"Let’s assume the coronavirus remains largely under control and the death rate does not spike," Burr says. "In this scenario, the rate on the 30-year fixed mortgage should stay in the mid-3% range, and this spring and summer should be the best selling period since before the 2008 recession."
It's smart to lock a low rate when you see something you like, so you won't miss out.
The Federal Reserve may help keep mortgage rates down. A popular Fed forecasting tool is predicting that the coronavirus threat will prompt policymakers to cut interest rates in mid-March and again in late April.
Fed rate cuts create a climate for lower borrowing costs that can influence how mortgage rates behave.
Take a look at today's best mortgage rates available where you are.
Other mortgage rates this week
Rates on 15-year fixed-rate mortgages have fallen to 2.95%, on average, according to Freddie Mac. Last week, those loans — which are a popular refinancing option — were going for an average 2.99%.
A year ago, 15-year fixed home loans were averaging 3.77%.
Rates on 5/1 adjustable-rate mortgages have dropped for the fourth week in a row. Those "ARMs" are fixed for five years and then can adjust up or down every year that follows.
Right now, ARMs are being offered at an average initial rate of 3.2%, down from 3.25% last week. Last year at this time, the starter rates on ARMs were at a stiffer 3.84%, on average.