The Covid pandemic did not just stop at affecting the physical health of individuals. It brought about a worldwide recession that the world is still combating with. No financial sector has been spared from the recession that has hurt the economy bad. Countries were already combating low market pace before the pandemic. Now this pandemic has dropped the markets at a new record low. The mortgage sector has also suffered in this race and its rates have gone down.
How has the pandemic hit the mortgage rates?
The mortgage rates have dipped gradually ever since the recession hit early this year. Unemployment rates were at an all time high. To keep the businesses running and save the cost, a lot of people had to lose their jobs. However, many were offered their jobs back soon when the market saw a boost. Home markets were strengthened in the process but still the home prices kept rising.
A survey that released lately, reveals shocking dips in the mortgage rates. The mortgage rates shifted down to a new record low and this is worrisome. The survey conducted by Bankrate, in the last week of October 2020, shows how the mortgage rates dipped to a record low. People are skeptical about mortgage refinance deals as well. Since home refinance services counts have gone down, it comes as no doubt that mortgage rates are suffering.
The Statistics Speaks the Conditions:
As per the survey, the mortgage rates for a 30-year fixed-rate mortgage dropped to 3.03 percent. It had dropped in comparison to the last week which recorded a rate of 3.06 percent. The 15-year fixed-rate mortgage also witnessed a record low. It fell to 2.46 percent. The survey figures were inclusive of the origination points and other fees.
However, financers are expecting that year 2021 may bring in some good figures. Mortgage rates are expected to climb up again by 2021. However, this is expected to happen if the economy keeps improving itself. Any more recessive thuds may change the expected results. And now with the news that has rushed in, corona cases are rising again in U.S. and Europe. This is certainly not a good sign. The share markets have already been hit as the market saw a sharp drop on a few days. But the experts are certain about this year. They have predicted that the rates will not be flattering this year for sure. Increasing corona cases and no potential thrust, yet, to bring back the economical strength, is no good. The market might just go even lower.
The reports presented that the hospitalization has gone up by 5 percent in October, in many states. The new cases have seen a rise of about 20 percent. If the speculations about a second wave are true, then we do not hope of seeing any good increase in the mortgage rates as well. However, we can always hope of good market developments. They can prove fruitful for the mortgage rates as well.