Finance

Fed keeps interest rates near zero, mortgage rates drop sharply

Photo by Jaye Haych on Unsplash

RISMedia

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

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