Over the past several weeks, Freddie Mac has reported the average 30-year fixed mortgage rates are dropping to record lows, all the way down to 3.03%. Last week’s reported rate reached the lowest point in the history of the survey, which dates back to 1971.
This is huge for homebuyers. Those currently taking advantage of the increasing affordability that comes with historically low interest rates are winning big.
Clearly, buyers are capitalizing on today’s low rates. As shown in the chart below, the average monthly mortgage payment decreases significantly when rates are as low as they are today.
A lower monthly payment means savings that can add up significantly over the life of a home loan. It also means that qualified buyers may be able to purchase more home for their money due to these lower mortgage rates. Maybe that’s a bigger home than what they’d be able to afford at a higher rate, an increasingly desirable option considering the amount of time families are now spending at home given today’s health crisis.