US 30-year benchmark mortgage drops to record 2.66%

WASHINGTON (AP) – Long-term mortgage rates in the United States fell this week to an all-time high for the 16th time in 2020, reflecting an economy hard hit by the coronavirus pandemic.

Mortgage giant Freddie Mac said Thursday that the average 30-year fixed-rate benchmark mortgage rate had slipped to an all-time high of 2.66% from 2.67% last week. A year ago it stood at 3.74%

The average 15-year fixed-rate loan rate, popular with homeowners looking to refinance their mortgages, fell from 2.21% to 2.19%. A year ago it was 3.19%.

The 5-year variable rate mortgage was unchanged this week at 2.79%. A year ago it was 3.45%.

Helped by rock bottom rates, the housing market has been a source of strength in an economy battered by the coronavirus epidemic. The Federal Reserve pushed the interest rate it controls to zero in an attempt to help the economy rebound from a spring shutdown.

But home sales have been hampered by a shortage of homes on the market. On Wednesday, the Commerce Department announced that sales of new single-family homes fell 11% from October to November, although purchases remain up nearly 21% from a year ago.

“In 2021, we expect rates to remain stable, but the main driver in the near term will be the trajectory of the COVID-19 pandemic and the execution of the vaccine,” said Sam Khater, chief economist at Freddie Mac.

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