Looking to buy a house? The average 30-year fixed mortgage has sunk below 3% for the first time in Freddie Mac's long history of tracking America's most beloved home loan, the Wall Street Journal reports. It's a "tremendous benchmark," says a Zillow Group Inc economist of the 2.98% rate. "It's also an indication that we remain in a crisis here." That's because mortgage rates usually move with the 10-year Treasury note yield, and yields sink when investors park their money in safe places (like bonds) to prepare for dark economic times. The Federal Reserve is also keeping its benchmark rate close to zero and snapping up mortgage bonds as it tries to rekindle the economy, per Bloomberg.
"A lot of it has been driven by the broader pandemic impact to the economy," Joel Kan, an official at the Mortgage Bankers Association, tells MarketWatch. "For a while we looked like we might be in a better place. But right now markets have been reacting to the resurgence in cases." The average 30-year fixed rate has been low—3.72% at the dawn of 2020 and 3.81% last year—but that isn't helping home sales like it otherwise might. After all, millions have lost their jobs and many fear a long-term downturn. Not to mention it's a seller's market and prices are high. "Ultimately, the course of the virus is going to dictate the course of housing market and the economy," says an economist. "Housing is not going to be immune to a double-dip recession." (Read more housing market stories.)