2020 was a wild year in many respects. As we move into the new year filled with hope the housing market remains strong. 2020 left us with a pandemic, an election and record low mortgage rates.
How Low Interest Rates Continue To Dictate The Market
Dated: September 3 2020
The summer of 2020 has, for many people, been the summer of quarantine. But it's also been the summer of historically low mortgage rates. In early August, the average interest rate on the 30-year fixed mortgage fell to 2.88% and has since hovered at close to 3%. Meanwhile, the average interest rate on the 15-year mortgage hit a low of 2.44% about a month ago, and since then it's stayed close to the 2.5% mark.
As a result, many prospective buyers have rushed to apply for mortgages so they can capitalize on these remarkably low rates. But a recent update from the Federal Reserve indicates that low mortgage rates may be with us for quite some time.
On Aug. 27, Federal Reserve Chair Jerome H. Powell stated that in all likelihood it will take a long time to recover from the recession the COVID-19 pandemic has caused. For that reason, interest rates will likely stay low until that recovery is complete.
Now to be clear, just because the Federal Reserve controls Interest Rates, it doesn't mean it has the same power over mortgage rates. In fact, mortgage rates are determined by supply and demand in a secondary market in which the Federal Reserve gets no say at all. But the Federal Reserve's policy can still influence mortgage rates, and that's what's been happening this summer.
For now, especially in the Charleston market demand is heavily outweighing supply. If you're looking to sell now could be the perfect opportunity to get top dollar from home! Although interest rates are low it may not be the best time for you to buy. If you have any questions about either please don't hesitate to contact us anytime. We're here to help in these crazy times!
About Dan Lorentz, ABR, CRS, Founder & Team Leader of Greater Charleston Properties: Founder and Team Leader of the Greater Charleston Properties Team, Dan Lorentz, has lived in the Charleston, SC ....