Nov. 5 (UPI) — U.S. mortgage rates hit a 12th record low this week amid pending outcomes in the federal election.
Matthew Speakman, an economist for Zillow, said the low rate this time was driven by the “uncertain outcome of the election.”
“The current uncertain outcome of the election appears to have led to a spike in demand for government bonds, placing downward pressure on mortgage rates,” Speakman said in a statement Wednesday.
The 30-year fixed-rate mortgage averaged 2.78% for the week ending Thursday, marking the lowest rate since 1971, Freddie Mac said.
The current mortgage rate also marks the 12th record low this year. The previous record low of 2.8% held for two weeks.
Mortgage rates have declined since March amid economic uncertainty over the COVID-19 pandemic.
“A day after rising to their highest levels since June, bond yields plummeted today, falling by more in one day than they have in any other day since April,” Speakman said. “In this case, bond market investors appear to be interpreting the uncertain election results as a sign that more economic stimulus is unlikely in the near term. The development helped push mortgage rates notably downward.”
“Given the still-uncertain election results, more sharp movements in mortgage rates in either direction may be on tap in the coming days and weeks,” Speakman added.
The Federal Reserve plans to hold its benchmark rate near zero.
Mortgage rates have been below 3% since July, but the demand for homes has exceeded supply leading to higher prices that cut into savings homebuyers gain from lower interest rates.
