Mortgage Rates Hit All-Time Low Amid Coronavirus Fears
There is now a plunge in the United States mortgage rates due to the rising economic impact caused by the coronavirus outbreak. With this, Americans are applying for new mortgages as they take advantage of the cheaper interest rates.
Global investors are starting to worry about China, urging them to secure safe-haven assets, the US Treasury Bonds for instance. According to Freddie Mac, as of March 5, the average 30-year mortgage hit an all-time low record of 3.29 percent, making it the lowest level since September. Also, the 15-year fixed-rate mortgage fell to 2.79 percent, while the 5/1 adjustable-rate mortgage fell to 3.18 percent.
A survey conducted by the Mortgage Bankers Association revealed that the Market Composite Index, a measure of the volume of the mortgage loan application, grew 15.1 percent on a seasonally adjusted basis last week. The Index rose to 29 percent compared from a week earlier on an unadjusted basis. Refinancing application spiked 26 percent from last week, making it 224 percent higher compared last year.
China and the Mortgage Market
Coronavirus is fueling market turmoil. The current situation goes to show that economic uncertainty in one part of the globe can spread rapidly and eventually affect consumers and investors.
The Chinese government continues to struggle to stop the rapid spread of the virus which started in Wuhan, China. Presently, fears stemming from the coronavirus outbreak has caused the plunge on China’s stock market. The U.S. market has also become more unstable as Dow plummeted 2,000 points recently. The global insecurity has prompted investors to secure U.S. Treasury bonds, which is a safer kind of investment compared to stocks.
Furthermore, government bond yields have also obtained a steep decline. The benchmark 10-year Treasury yield briefly reached an all-time low of 0.318 percent in overnight trading. The 10-year yield is essential in the U.S. economy as it benchmarks mortgage rates.
As aftermath, a 30-year fixed mortgage’s average interest rate also slipped to .51 percent to 3.72 percent last month. The difference may not seem as much, but it makes a huge difference for long-term borrowers.
Zillow economist Matthew Speakman said that the impact of coronavirus on human life and the economy continues to be unknown. Now that the coronavirus exists, it will remain to be the main driver of the movement of mortgage rates in the upcoming weeks.
The rise of the number of people applying for a mortgage loan may be a positive sign, but economists say that there is one problem. Recently, the inventory of homes up for sale has decreased as demands from buyers increased.
The low inventory is caused by lower construction activity following the recession, slowing the pace of household building in the U.S. Several investors also purchased homes that were eventually converted into rentals.
More in Investments & Savings
Kim Kardashian Fans Reveal the One Inspiring Quality that Made Them Admire Her Despite Her Past
Kim Kardashian has earned her fair share of haters and critics over the years. Fortunately, they’re balanced out by the many...July 2, 2021
Exclusive: Everything That Scarlet Johansson Splurges On
Scarlett Johansson is one of the biggest stars in the entertainment industry. She calls the shots on screen and off-screen with...July 1, 2021
All Those Paris Hilton Scandals Make Her Family Reconsider Her Inheritence
The media personality’s antics, that Paris Hilton was up to ages ago to come into the limelight, have had a huge...June 30, 2021
Super-Rich People Spend Money In Ways That Us Plebs Cannot Comprehend – I
We know the Lannisters pay their debts and Uncle Scrooge enjoys diving into his ocean of money. But how do super-...June 29, 2021
How do Celebs Celebrate Their Birthdays? By Being VERY Extra, Apparently
Have you ever wondered what birthday party you would throw for your friends and family if you suddenly possessed a large...June 28, 2021
All You Need to Know about the Fall and Return of Iceland’s Sole Billionaire
To be among the wealthy places you in an invincible position. Reviewing the wealthiest celebrities today, will any of them ever...June 25, 2021
The Newest Crowdfunding Success is the New Segway Ninebot Scooter. And We Wish We had One, Too!
The KickScooter F Series was fully funded within 10 minutes of its campaign launch on Indiegogo and an outstanding success not...June 24, 2021
These Historical Tours Broke All Records and Made Millions
The lives of musicians today are vastly different from before, due to the proliferation of streaming platforms and social media access....June 23, 2021
Want a Celebrity Endorsor to Boost Your Brand’s Value? Here are Things You Need to Consider First
To get a new company off the ground, the idea of getting a celebrity endorsement for your product or service can...June 22, 2021