Instant Reaction: Mortgage Rates, October 8, 2020

Mortgage rates fell slightly this week as mortgage applications rose. Specifically, the 30-year fixed-rate mortgage ticked down to average 2.87% this week from 2.88% the prior week.

Rates have stabilized below 3% for more than 2 months. In the meantime, data shows that smaller cities are gaining population. With one out of three adults substituting some or all of their typical in-person work for telework, these ultra-low rates can help many people to purchase their homes in these less crowded areas. Parsing out by age, telework is even more popular with Millennials and nearly 45% of them are working remotely. While Millennials make up the largest cohort of homebuyers, more Millennial buyers are expected to benefit from these low rates as well. Thus, strong housing market momentum is expected to continue into the fall and winter months.