Mortgage Interest Rates Hit All-time Low for 13th Time in 2020

Average U.S. mortgage interest rates keep reaching new lows, falling to an all-time low for the 13th time this year, according to Freddie Mac's weekly Primary Mortgage Market Survey.

The 30-year, fixed-rate mortgage loan interest rate averaged 2.72 percent, with an average 0.7 point, for the week ending November 19, 2020. It was the lowest rate in Freddie Mac's mortgage survey history, which dates back to 1971. The 30-year note averaged 2.84 percent the week before and 3.66 percent the same week last year.

"Weaker consumer spending data, which accounts for the majority of economic growth, drove mortgage rates to a new record low," Sam Khater, Freddie Mac's Chief Economist, said. "While economic growth remains unstable, strong housing demand continues to have a domino effect on many other segments of the economy."

Homebuyers who purchase homes in the $400,000 range, with a 10 percent down payment, are saving about $185 a month at current interest rates compared to mortgage loan interest rates during the same period last year.

The number of single-family homes, condominiums, and multi-family dwellings on the market in the Greater Boston area has dramatically decreased over the past year, according to data compiled by MLS Property Information Network, Inc. (MLSPIN). On November 21, 2019, there were 15,657 homes for sale compared to 10,712 listed on MLSPIN on November 21, 2020.

The Mortgage Bankers Association (MBA) reported in its Weekly Mortgage Applications Survey that mortgage applications to purchase increased for the week ending November 13, 2020. The seasonally adjusted "Purchase Index" rose 4 percent from the prior week. The unadjusted Purchase Index dropped 1 percent compared with the previous week, but applications to purchase jumped 26 percent compared to the same week last year.

"The purchase market recovered from its recent weekly slump ... climbing above year-ago levels for the 26th straight week," Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting, said. "Housing demand remains supported by the ongoing recovery in the job market, and an increased appetite from households seeking more space because of the pandemic."

The 15-year, fixed-rate mortgage loan averaged 2.28 percent, with an average 0.6 point. The 15-year loan, a popular choice for refinancing, averaged 2.34 percent the prior week and 3.15 percent the same week last year.

The five-year, adjustable-rate mortgage (ARM) loan averaged 2.85 percent, with an average 0.3 point, down slightly from the week before when it averaged 3.11 percent. The five-year ARM averaged 3.39 percent last year.