Instant Reaction: Mortgage Rates, August 27, 2020

Mortgage rates dropped this week to average 2.91%, from 2.99% the prior week. Earlier this morning, the Fed announced the adoption of a more flexible policy that will seek to achieve inflation that averages 2% over time. This means that a period where inflation is above 2% can compensate for a period when inflation is below 2%.

This significant change can keep interest rates low for longer periods, which could translate into both long periods of cheap mortgages and a stronger job market. Thus, more and more homebuyers and homeowners are expected to take advantage of these ultra-low rates.