On Thursday, Freddie Mac, the public government-sponsored US Federal Home Loan Corporation, based on Virginia, had issued a statement saying that the US 30-year fixed rate mortgage, the popular-most mortgage scheme in the United States, had been dropped to an all-time low of 2.98 per cent on the later part of the day compared to a reading of 3.03 per cent a week earlier.
In point of fact, the Virginia-based US Federal Home Loan Corporation had also added at its statement that the 30-year fixed rate mortgage had never fallen below 3 per cent since the public-government sponsored agency had begun to track the data back in the 1971s.
Multi-year low Fed benchmark interest rate weighs on mortgages
Aside from that, Freddie Mac had also been quoted saying at its Thursday statement that the historic plunge in mortgage rate had been reflecting the market participants’ reluctance for safe-haven assets such as US Treasuries, which had been trading near their all-time lows, while the US Federal Reserve Chair Jerome Powell’s remarks made earlier this month had been signalling a multi-year low interest rate at least until mid-2021.
Beside, adding that the sweeping plunge in US mortgage rate would likely to spur up consumer spending in US housing market and to proffer another stimulus for the economy, a Chief Investment Strategist at the Leuthold Group, Jim Paulsen said followed by the release of Freddie Mac announcement, “You’re seeing unprecedented policy support and it’s filtering down to the mortgage market.
You’re likely to see more improvements in retail spending numbers and auto loan rates the lower interest rates go”. Besides, while the US 30-year fixed mortgage had hit a 50-year low on record this week, the 15-year fixed mortgage fell to 2.48 per cent on an average from 2.51 per cent a week earlier, while the five-year treasury-indexed adjustable mortgage rate rose to 3.06 per cent compared to a reading of 3.02 per cent a week earlier, suggesting a sheer loatheness among the investors for the safe-haven assets such as US treasuries.