In a recent Housingwire.com article (here) by Kathleen Howley, we learn that the current average 30-year mortgage interest rate of 3.24% is within one basis point[1] of its all-time low of 3.23%. According to article:
Fannie Mae projected last week the average this quarter would be 3.2%, followed by 3.1% in the third quarter and 3% in the fourth quarter.
Fannie Mae is forecasting an average of 2.9% for every quarter of 2021.
Of course, in this era of COVID, predictions are a commodity not in short supply. The truth will be in the actual numbers.
Speaking of numbers, one thing that is in short supply is housing inventory – which is the reason that prices in some regions, such as the Portland Metropolitan area, are still going up.
At the end of April we completed one full month following the Governor’s March 23, 2020 stay-at-home order. At the time, there was serious concern how this would affect local real estate sales. The overall numbers were predictably discouraging, but interestingly, home prices still increased. However, one month does not a selling season make. See statistics here.
But one segment of the housing population that will benefit from low interest rates, notwithstanding COVID’s economic interruption, are homeowners seeking to refinance.
That probably will push refinancing volume to a 17-year high, according to the [FNMA] forecast. Lenders likely will originate $1.5 trillion in refis in 2020, a 51% jump from 2019, according to the forecast. That would be the highest level since 2003 when $2.5 trillion of mortgages were refinanced, according to data from the Mortgage Bankers Association.
~Phil
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