Market volatility around the 2020 election is pushing mortgage rates down even lower, helping the real estate business to continue an already historic year. Thirty year fixed mortgages are at 2.77%, declining .04% last week after already historic lows. This marks a .9% difference in rates from one year ago. Economists are attributing the change due to the uncertainty around the elections with no clear winner into late Thursday afternoon.
Some analysts were expecting a volatile stock market due to uncertainty, but that scenario has not played out at all. Wall Street seems to like the prospect of a balance of power that may prevail after the votes are counted. Mortgages across the board declined with 15 year fixed mortgages reportedly hitting a record low.
For some Americans that are still working, their 401(k)s are rising even while their mortgage payments are declining. Ironically, part of the reason the interest rates are low is because of unemployment, as more than 750,000 people filed for unemployment last week.
Needless to say, banks and credit unions are busy with refinancing applications despite the refinancing market already being red hot in 2020. The industry is up more than 75% year over year. Homebuyers are out in the marketplace, with the potential of a short term real estate boom in specific markets not only due to the rates, but the continued search for more work space within the home due to the impact Covid is having on the workplace.
Month over month sales of homes are breaking records even into the fall with bidding wars in the suburbs. In states such as Connecticut, where prices have been stagnant for a decade, the move from major cities such as Boston and New York are bringing raising prices despite the economy being hard hit by Covid.
As long as interest rates continue to decline, analysts expect the month of November to continue to keep lenders busy even as the Covid cases surge. In several markets, the pandemic has proved the solution to stagnant housing prices and has inspired first time home buyers to enter the market.