Mortgage rates hit another record low this week, for the twelfth time since the beginning of the year. Following the trend of the 10-year Treasury yields, the 30-year fixed-rate mortgage fell to an average of 2.78% from 2.81% the previous week. Uncertainty about the result of the elections pushed rates down.
In the meantime, people continue to save more than pre-pandemic—nearly 14% of their disposable income. In addition, personal income rose by 6% in September compared to a year earlier. With people saving more than before, homebuying is more attractive although home prices continue to rise. Meanwhile, these ultra-low mortgage rates significantly lower mortgage payments, making housing more affordable than a year earlier in many areas. For instance, in the Washington DC metro area, although home prices rose nearly 12% compared to a year earlier, the monthly payment for a 30-year fixed-rate mortgage is lower than a year earlier at $1,820.With mortgage rates hovering near record lows, expect real estate to stay strong.