Mortgage rates fell this week as market watchers await the key jobs data release on Friday. Specifically, the 30-year fixed-rate mortgage dropped to average 2.88% this week from 2.90% the prior week. Rates have stabilized below 3% for more than 2 months.
Mortgage rates varied from 6-11% in the 1990s and 5-9% in the early 2000s. However, current rates are hovering below 3%. In the meantime, high demand and a limited supply of homes continued to push up prices. With home prices to rise in 96% of metropolitan areas, many potential buyers are concerned about saving for a downpayment. Nevertheless, these ultra-low mortgage rates significantly lower the borrowing cost. Moreover, remember that the median down payment is 6% for first-time homebuyers, according to NAR’s Profile of Home Buyers and Sellers.Looking ahead, mortgage rates are expected to stay historically low, with more homebuyers to benefit from these low rates. As a result, home sales will likely continue to rise for the remainder of the year.