Mortgage rates dipped below 3 percent on June 11, setting an all-time low. But the reason for crazy low interest rates may not be something to cheer about. CNBC reports that fears of a second wave of COVID-19 are pushing rates down again after they were poised to start climbing as the economy recovers from economic fallout of the pandemic. And though strong housing demand and low interest rates may be bolstering the housing market now, mortgage credit availability hit a 6-year low as lending firms tighten their standards, making it more difficult for some homebuyers to obtain a loan.
Barely a week ago it looked like mortgage rates were finally breaking higher, but in a sudden reversal, they just set a new record low.
The average rate on the popular 30-year fixed mortgage hit 2.97% Thursday, according to Mortgage News Daily, as the stock market sold off and investors rushed to the relative safety of the bond market. Mortgage rates loosely follow the yield on the 10-year U.S. Treasury.
For top-tier borrowers, some lenders were quoting as low as 2.75%. Lower-tier borrowers would see higher rates.