April 2020 Real Estate News
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In this month’s April 2020 Real Estate News, learn more about how market volatility is affecting mortgage rates. As we continue in the current COVID-19 crisis, the market is changing often and we encourage you to contact us for any specific questions concerning the latest news. Also in this issue, get some helpful tips on freshening up your home or getting started with spring cleaning. All of this and more in the April 2020 Real Estate News.
Market Volatility Is Affecting Mortgage Rates
In early March, the 30-year rate plunged to its lowest level in 50 years, at 3.29%, when the Fed dropped the federal funds rate to zero. Market fears stoked by concern over the global outbreak of COVID-19 helped drive down bond yields, which are tied to mortgage interest rates.
More Homeowners Are Refinancing
Homeowners scrambled to refinance and lock in the low rate. Surging mortgage applications overwhelmed lenders. The wave of mortgage applications caused an imbalance in the secondary mortgage market—there were more mortgage-backed securities to be sold than there were investors ready to buy them. Mortgage rates quickly rose to nearly 4 percent.
The Federal Reserve Is Acting to Stabilize the Market
The Federal Reserve began buying mortgage-backed securities in an effort to settle the lending market. Rising mortgage rates quickly dropped 15 points. According to Freddie Mac, the average rate on a 30-year, fixed-rate mortgage fell to 3.5% for the week ending March 26.
The dramatic swings back and forth are a result of the volatility in financial markets caused by the global coronavirus pandemic. The Fed’s quantitative easing policy, which includes unlimited bond-buying, appears to have calmed the secondary market somewhat.
April 2020 Real Estate News
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Marina Jacobson
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