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Mortgage rates fell this week as market watchers await the key jobs data release on Friday. Specifically, the 30-year fixed-rate mortgage dropped to average 2.88% this week from 2.90% the prior week. Rates have stabilized below 3% for more than 2 months.
Mortgage rates varied from 6-11% in the 1990s and 5-9% in the early 2000s. However, current rates are hovering below 3%. In the meantime, high demand and a limited supply of homes continued to push up prices. With home prices to rise in 96% of metropolitan areas, many potential buyers are concerned about saving for a downpayment. Nevertheless, these ultra-low mortgage rates significantly lower the borrowing cost. Moreover, remember that the median down payment is 6% for first-time homebuyers, according to NAR’s Profile of Home Buyers and Sellers.
Looking ahead, mortgage rates are expected to stay historically low, with more homebuyers to benefit from these low rates. As a result, home sales will likely continue to rise for the remainder of the year.