The average rate on a 30-year fixed mortgage fell to 2.98% Thursday morning, the lowest it has been in nearly 50 years.
The dip represents the third consecutive week and the seventh time this year that rates on the 30-year fixed mortgage have fallen, according to The Wall Street Journal. The average rate on the 30-year mortgage stood at 3.72% at the beginning of the year and 3.81% a year ago, according to Freddie Mac.
When rates took a dive in early March, it sparked a large refinancing environment, says Kenny Hodges, CEO at Baton Rouge-based Assurance Financial.
“The housing markets are on fire right now, partially from pent-up demand from the spring and low rates, which is creating a great housing environment for the local buyers and sellers,” Hodges says.
Hodges anticipates rates being low for the next couple of years.
Low mortgage rates typically boost home sales, but they did little to ease the pandemic’s impact nationwide on the housing market this spring. Existing-home sales fell 9.7% in May from the month prior and 17.8% in April, according to the National Association of Realtors. Locally, home sales also fell in April and May, though they picked up considerably in June.
The largest challenge mortgage lenders are currently facing is keeping up with the volume of business, Hodges says. In the first half of the year, Assurance Financial had done as much business as it had through 2019. He credits the more than 100% increase in activity to refinancing, though he notes they’re taking care of buyers first.
“We’re prioritizing purchasing business so that they can meet deadlines and transactions can take place according to contracts,” Hodges says.
