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Mortgage rates drop to another historic low at 2.78%

The average U.S. mortgage rate for a 30-year fixed loan fell 3 basis points this week to 2.78%, Freddie Mac said in a report on Thursday, the lowest rate in the survey’s near 50-year history. This week’s rate broke the previous record low on Oct. 22 by 2 basis points.

The average fixed rate for a 15-year mortgage remained unchanged from the previous week at 2.32%.

After this week’s dip, there have now been 15 consecutive weeks when average mortgage rates have been below 3%. This week’s rate also marks the 12th time this year mortgage rates have broken their own record, a sentiment Sam Khater, Freddie Mac’s chief economist, said is likely due to political and economic ambiguity.

“Despite the uncertainty that we’ve all experienced this year, the housing market, buoyed by low rates, continues to be a bright spot,” Khater said.

While HousingWire outlined what both a Biden and Trump win would mean for the mortgage industry, observers from across the housing and mortgage space believe interest rates will continue to hover near historic lows for the next several years, regardless of who is in the White House.

In an effort to buffer economic blows, the Federal Reserve began buying bonds in March to make borrowing cheaper. Now, a report from ATTOM Data Solutions revealed 16.7 million residential properties in the U.S are considered equity rich – outnumbering those seriously underwater by an almost five-to-one margin.

A swelling demand pushed home prices to rise in September –  an estimated 6.7% year-over-year – with rate lock activity up 4% half way through October as both new homeowners and repeat customers take advantage of low rates. If this increased activity continues, Black Knight is estimating $4 trillion in mortgage origination volume by the end of 2020.