Mortgage rates hit 10th record low of 2020

Better.com
ByΒ Better.com

Mortgage News: Mortgage Rates Hit Their 10th Record Low This Year


Here’s a look at the latest developments in the mortgage market for the week beginning 10/19/20.

  • Mortgage rates hit 10th record low of 2020
  • More sellers are listing their homes as market steadily recovers
  • Builder confidence reaches another new high
  • What factors really affect mortgage rates?

Mortgage rates hit 10th record low of 2020

The average 30-year fixed mortgage rate fell to 2.81% last week, hitting yet another all-time low. This decline marked the 10th drop below all previous records in 2020.

This year’s low rates have set off a flurry of home loan applications for both purchase and refinance. However, with a high number of existing mortgages either in forbearance or seriously delinquent, many lenders have tightened their credit standards, making all-time low rates available to only the most credit-worthy borrowers.

For applicants with less-than-perfect credit, buying points may still provide access to record-low rates. As Better Mortgage Director of Sales, Lucy Randall, explains, β€œMortgage points β€” or discount points β€” allow you to pay more in closing costs in exchange for a lower mortgage rate. That means you’ll have a bigger upfront fee, but a lower monthly payment over the life of your loan.”

As always, homebuyers and homeowners who are considering a mortgage should apply to see the rates that are available to them and explore what options are available from there.

More sellers are listing their homes as market steadily recovers

Even as skyrocketing home prices begin to curb sales, the housing market continues to show signs of health. According to Realtor.com, new listings were up 2.7% week-over-week as seller confidence swelled.

Normally, a seasonal decline in new listings is expected throughout the fall. But if new inventory continues to become available at this pace, 2020’s housing market may buck expectations once again.

Builder confidence reaches another new high

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which measures builder confidence in the market for newly built single-family homes, just broke another record. October’s index shows an increase of 2 points to 85 from September’s previous all-time high of 83.

This could be another indicator that the gap between supply and demand, which has driven home prices to unprecedented heights, may be on its way to narrowing.

What factors really affect mortgage rates?

Mortgage rates are always fluctuating, but for anyone following industry news, the reasons why rates change can be a bit of mystery. The rates offered by lenders don’t necessarily coincide with the Federal Reserve’s benchmark rate. Bad news for the economy often means good news for prospective loan applicants β€” except when it doesn’t. To shed light on these patterns, Better Mortgage’s Brendan Phillips has provided an in-depth walkthrough of what actually moves mortgage rates and why rates may not always behave as expected.

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