Feb 8, 2020 - Economy & Business

U.S. fixed mortgage rates drop to three-year low

Illustration: Sarah Grillo/Axios Visuals

The average rates for 15- and 30-year fixed mortgage dipped to their lowest levels in three years this week, per new data from mortgage giant Freddie Mac.

The big picture: The bottom rung of the housing ladder has now ascended beyond the grasp of millions of Americans, regardless of whether they want to rent or buy, Axios' Felix Salmon reported last week. Home prices have surged in recent years.

Catch up quick: 15-year and 30-year fixed mortgage rates are continuing a steady decline that began around the new year, while hybrid adjustable-rate mortgages spiked slightly this week, per Freddie Mac.

  • "Consistently low mortgage rates" helped drive home sales higher in December, the Wall Street Journal reports.
  • "Lenders extended a greater volume of home loans in 2019 than any year since 2006," WSJ wrote, citing industry research from Inside Mortgage Finance.

What they're saying: “It’s very much a historical opportunity for folks who have an existing mortgage to refinance and for credit-qualified people to lock in a low rate,” Doug Duncan, chief economist at Fannie Mae, told the WSJ.

Go deeper: The housing market faces an uncertain 2020

Go deeper

Americans want to buy homes, but they're disappearing

Reproduced from Fannie Mae; Chart: Axios Visuals

The steady decline in U.S. interest rates helped the housing sector recover from its malaise in early 2019, and the momentum is continuing so far in 2020.

Yes but: Prospective homeowners are finding it increasingly difficult to find a home, as the lower rates have brought on increased selling prices and fewer available homes.

Record low rates could exacerbate debt, housing issues

Illustration: Rebecca Zisser

The stock market selloff has drawn the most attention this week, but moves in the U.S. government debt market will likely have much more important impacts on the economy.

The state of play: Mass bond buying has taken place since the beginning of the year and picked up steam as headlines about the spread of novel coronavirus have grown more worrisome.

U.S. household debt tops $14 trillion for first time

Illustration: Sara Grillo

Household debt increased by more than $600 billion last year, topping $14 trillion for the first time and marking the largest one-year jump since 2007, new data from the New York Fed show.

Why now? The growth was driven mainly by a large increase in mortgage debt balances, which rose by $433 billion.