Mortgage rates remained unchanged at their record lows towards Thanksgiving as investors responded to an increasing resurgence in coronavirus cases.
Another factor driving both interest rates and mortgage-backed securities yields, which have remained at record lows in recent days, was the Federal Reserve's quantitative easing purchases, Optimal Blue said in a Nov. 23 release.
"Until these quantitative measures are reversed and the COVID recovery path becomes clearer, returns on MBS and mortgage rates are likely to be significantly isolated from other market factors that would otherwise result in higher interest rates," said Optimal Blue.
The 30-year fixed rate mortgage averaged 2.72% for the week ended November 25, and was flat from last week, according to Freddie Mac's primary mortgage market survey. A year ago, the 30-year fixed-rate mortgage averaged 3.68% at that point.
"Mortgage rates remain at record lows, and while this has sparked a refinancing boom, this has been mainly driven by higher-income borrowers. With approximately 20 million refinancing borrowers, lower and middle-income borrowers are putting money on the table by not taking advantage of lower Interest, "said Sam Khater, Freddie Mac's chief economist, in a press release.
"On the home buying side, demand continues to rise and a sellers' market is emerging where inventory levels are at record lows and home prices are rising, gradually offsetting the benefits of low interest rates."
The 15-year fixed rate mortgage averaged 2.28% and was unchanged from last week. A year ago, the 15-year fixed-rate mortgage averaged 3.15% at that point.
The five-year Treasury-indexed hybrid variable rate mortgage averaged 3.16%, averaging 0.3 points, compared to last week when it averaged 2.85%. A year ago, the average five-year variable rate mortgage at that point averaged 3.43%.