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Dream time
Mortgage rates, according to Freddie Mac, reached a historic low again this week, but do not expect the low rates to last forever.
The average fixed interest rate of 30 years was 2.65% for the week ending January 7, 2021, a new low, according to the weekly survey of the mortgage rate. In a statement, Sam Khater, the chief economist of the company, says that recent low rates are offset by the rising house prices, which disputes the affordability of the houses.
Affordability of homes emerged worryingly in the second half of 2020, as economists warned that rapidly rising prices were making it harder for some prospective buyers to enter the market, even amid historically low mortgage rates. The high demand from buyers, probably driven in part by shifts through the pandemic, as well as historically low interest rates and changing demographics, and low supply to buy homes, contributed to prices climbing the fastest pace in years in October. the latest month for which Case-Shiller index data is available.
But further pressure on the affordability of homes could come as mortgage rates rise, Khater writes in the release. The economist said he expects tariffs to rise moderately during 2021 as the economy recovers from the Covid-19 pandemic and vaccinations begin to take effect, Khater wrote in an email. Barron’s. While Khater noted that a rise in tariffs depends on the distribution of vaccines, he said tariffs are likely to rise slowly, with the largest increase in the second half of the year.
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