As of mid-July, mortgage interest rates dropped to historic levels. In fact, the average 30-fixed-rate mortgage settled below the 3% mark! As Kathy Fettke points out in a recent episode of Real Estate News for Investors, low rates are great for buyers, but are also the results of the current pandemic-induced crisis. Indeed…
“Mortgage rates tend to drop when investors pour money into the 10-year U.S. Treasury bond. When there’s more demand from investors buying up Treasurys, bond prices rise as yields go down (just like in real estate, when prices rise and cash flows decline). Investors who typically buy bonds also buy mortgage-backed securities for the same reason — for safety, even if the return is lower.”
