30-year mortgage again hits record low

Mortgage rates in the U.S. have hit another record low.

The average for a 30-year, fixed loan dropped to 2.81 percent, down from 2.87 percent last week and the lowest in almost 50 years of data-keeping, Freddie Mac said in a statement thursday. It was the 10th record low this year. The previous one — 2.86 percent — held for about a month.

The slide in borrowing costs that began in March, as fears of the coronavirus drove investors to the safety of Treasuries, shows no signs of stopping. The Federal Reserve has signaled it will hold its benchmark rate near zero through at least 2023.

Cheap loans have been fueling a housing rally that has bolstered the pandemic economy, even amid persistent job losses. Purchases have soared and millions of current homeowners have been able to save money by refinancing.

But surging demand for the scarce supply is pushing up prices, putting homeownership out of reach for many Americans. And lenders have tightened credit standards, presenting another potential obstacle for would-be buyers.

“It’s important to remember that not all people are able to take advantage of low rates, given the effects of the pandemic,” Sam Khater, Freddie Mac’s chief economist, said in the statement.

For borrowers, the difference in the 30-year fixed-rate this week compared with this same time last year is a savings of as much as $190 per month on a $400,000 loan.

“One solution for buyers looking for affordability is to move farther away from the city where they can find lower prices and still benefit from lower rates. That’s easier for people who can work from home and don’t need to commute,” said Lawrence Yun, chief economist for the National Association of Realtors.