This morning Freddie Mac reported a new low – the average mortgage rate for a 30-year fixed loan fell to 2.8% this week. The rate fell one basis points from the week prior and is now six basis points lower than the original all-time low set in mid-September.

The average fixed rate for a 15-year mortgage was 2.33%, falling from last week’s 2.35%.

After the dip this week, we have seen 13 consecutive weeks when average mortgage rates have been below 3%, and rates have broken records 11 times this year. Freddie Mac’s chief economist Sam Khater reported

“Mortgage rates remain very low, providing homeowners who have not already taken advantage of this environment ample opportunity to do so, mortgage rates today are on average more than a full percentage point lower than rates over the last five years.”

In March, in an effort to buffer the economic blows from the shutdown, Federal Reserve Chairman Jerome Powell announced the Fed would start buying bonds in an effort to make borrowing cheaper. According to CNBC data, the central bank has bought over $1 trillion in bonds backed by home loans.

While purchase loans are seeing record-low rates, the adverse market fee imposed on refinance loans by the FHFA in August make record lows for those loans unlikely.
During this week’s Mortgage Bankers Association annual event, the heads of Fannie Mae and Freddie Mac discussed the adverse market fee.

“As you know, safety and soundness are one, two, and three for us. And for us to play our role in all markets, good and bad, markets small and large, we have to do it safely and soundly with long-term risk management in mind. And that’s the rationale for this change, as the GSEs are shouldering significant risks associated with the pandemic — as the principal risk taker, we have to price that risk appropriately.”

While the housing market has demonstrated true resiliency, there are many millions of borrowers that continue to be under stress, – and there’s still significant risk caused by economic uncertainty both in the near term and the longer term.

It should be noted that with interest rates still low, borrowers will discover savings, even with the 50 basis point refinance fee factored. For those that refinance, the current mortgage at a lower rate will allow them to save in terms of payments – but a little bit less every month can make a difference in the long run.