U.S. average rates on long-term mortgages edged down slightly last week, remaining at historically low levels.
Mortgage buyer Freddie Mac reported Thursday that the average rate on the 30-year home loan fell to 2.88% from 2.90% last week. One year ago, the rate averaged 3.65%.
The average rate on the 15-year fixed-rate mortgage also fell, to 2.36% from 2.40% last week.
Low interest rates have made already strong demand for housing even more robust, but a lack of available supply has flummoxed would-be buyers.
Last week, the National Association of Realtors reported that the number of existing homes for sale in August was 1.49 million units, a decline of 18.6% from the same time last year. The dearth of inventory has also pushed prices higher, with the median price for both existing and new single-family homes pushing past $310,000.
Economists were concerned about the lack of available homes for sale even before the coronavirus outbreak made many homeowners think twice about upgrading.
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Bottom line: Sellers, reap the reward of selling now in a seller's market--low inventory means higher demand and higher sale prices. Buyers, low interest rates should trump home prices if this will be a long(er) term investment (5+ years).