On Dec. 16, the Federal Reserve announced it would be keeping its short-term interest rate near zero. The Fed cut rate to near-zero levels in March, and in recent policy meetings has stated they will likely remain that way for the next couple of years as the economy rebounds from the COVID-19 pandemic.
[…] The 30-year fixed rate mortgage decreased this week, hitting a record low of 2.67 percent, according to the National Association of REALTORS® (NAR). NAR predicts that the 30-year fixed-rate mortgage will average 2.9 percent and 3.0 percent in the first and second quarter of 2021, respectively.
“There is no doubt that these ultra-low mortgage rates significantly lower the borrowing cost, making home-buying more attractive to renters. In the meantime, the share of millennial renters that can afford to buy the typical home rose in 2019 by 9 percent and 3 percent compared to a year and 5 years earlier, respectively. With both wages and consumer savings rising during the pandemic, expect home-buying activity to remain strong in the year ahead,” said NAR Research Economist Nadia Evangelou in a statement.
Read the story here: Fed Keeps Interest Rates Near Zero, Mortgage Rates Drop Sharply