What a difference a week makes! Rates dropped significantly last week and once again today. Last week we moved from 2.99% to 3.125%, this week we are back to 2.99%. Not only have interest rates reversed to 2.99% but origination fees are also lower.
The financial markets are showing concern about a “2nd wave” of COVID as cases in the US are spiking again. Stocks sold off Thursday, rebounded Friday and were down again today.
The good news for the real-estate market is that 10-yr Treasury continues to decline along with the 30-yr mortgage interest rate(mostly). I have attached an image of the last year illustrating the 10-yr treasury vs the 30-yr mortgage interest rates. Historically, the two have moved in tandem. You will see a deflection in that historical pattern in 2020-03 (March 2020) on the graph. The historical pattern is beginning to return to normal but has not fully re-established itself like prior to COVID. This phenomenon is directly caused by COVID and the uncertainty it has caused. The two returning to historical norms signals more predictability in the financial markets. Both the 10-yr and the 30-yr interest rate are at or below historical lows.
Random stat: Did you know the average age of a first-time homebuyer is 33 years-old in the US?