(CNN)Mortgage rates fell below 3% for the first time ever as the economy continues to struggle from the effects of the coronavirus pandemic.
The average 30-year fixed-rate mortgage fell to a record low of 2.98% this past week, according to Freddie Mac. That’s the lowest level in the nearly 50 years of the mortgage giant’s survey. The 15-year fixed-rate mortgage dropped to 2.48%.
The average rate for a 30-year-fixed mortgage dropped below last week’s record low of 3.03% and marks the seventh new low since March.
Record-low rates have led to increased demand among homebuyers, according to Freddie Mac.
But the mortgage giant warns that the rise in new virus cases is stalling the the economic recovery, and this pause risks turning temporary layoffs into permanent job losses. That could negatively impact home buying.
The record low rates have come amid a roller coaster of optimism and pessimism about the economy, said Danielle Hale, chief economist for Realtor.com.
“On the downside, an escalating number of coronavirus cases in a growing number of states demonstrate how hard the virus is to contain, especially when trying to jump-start the economy,” she said. “On the upside, signs of progress toward a coronavirus vaccine give hope that there’s a path to a new normal where health concerns don’t dominate decision making.”
This week, concerns about the economy have helped to push mortgage rates lower. Meanwhile, the opportunity created by lower mortgage rates is driving up home buying, and pushing up new mortgage applications from a year ago, she said.
Rates that are more than 80 basis points below last year’s level mean financing the typical home is $125 less per month versus the same-priced home at last year’s rates, she said.
“This is opening doors for many homebuyers, even as the number of homes available for sale dwindles,” Hale said.