Having moderated around 2.9 percent since early September, the average rate for a benchmark 30-year mortgage inched down 6 basis points over the past week to a new all-time low of 2.81 percent, which is 88 basis points below its mark at the same time last year and 5 basis points below its previous all-time low rate of 2.86 percent was set five weeks ago, according to Freddie Mac’s Mortgage Market Survey data.

At the same time, the average rate for a 15-year fixed mortgage has inched down to 2.35 percent, which is 80 basis points below its mark at the same time last year and equal to the all-time low it hit four weeks ago, while the average rate for a 5-year adjustable is holding around 2.90 percent, which is 45 basis points below its mark at the same time last year but 34 basis points above its all-time low of 2.56 percent in May of 2013.

Comments from Plugged-In Readers

  1. Posted by rl

    The air is still leaving the balloon, no matter how much they keep pumping.

    • Posted by two beers

      …and the more they pump, the deeper the bust will be, and the longer it will take to recover.

      • Posted by ST

        I am sure in the minority, but I want to be able to take advantage of this market weakness. For the first time in a long long time, MFH in south bay is dropping. And as rents reset, MFH price should reset accordingly too.

        It has been impossible to invest in South Bay up to this point, where you can buy a $2M home and [only] collect $4500 in rent. That is why I have been investing in SF, because it is impossible to do it in South Bay, thanks for rent control laws in SF, IMO….

        It is slowly looking likely now.

        • Posted by Kunal

          MGH should drop more no? As rent reset takes time to get reflected in prices.

        • Posted by wilson

          Can you elaborate on your plan here? Ballpark numbers, getting $4500 rent for a $2M property looks very cash flow negative pre-COVID. And if rents are dropping, wouldn’t prices have to drop a huge amount for this work from a cash flow angle? And if prices are going to drop, that doesn’t work from a equity appreciation angle….

        • Posted by Dave (Seattle dude)

          Every investor is different but your numbers are not what I look for. They don’t really add up but I’m surely missing something. I get $1700/month rent on my Midwest homes which are worth about 290K each. My property taxes are far, far lower also. Sure, I pay 6% for a rock star manger but I have great cash flow on homes in class A and B neighborhoods. My Northwest properties are pricier – about 750K – but I’m getting 2500 or so a month in rent. Some investors prefer to purchase locally – that would have been a hindrance for me given the prices here. I now own 9 rentals worth in total about 4 million which might get you 2 homes in the BA. Why not invest in the North Bay (Santa Rosa area) or the outer East Bay? Not as pricey and likely to see more appreciation than SF or the South Bay in the coming years. .

          • Posted by Ohlone Californio

            2500 on a 750K valuation? For a GRM of 25? That’s very easy to find in SF.

  2. Posted by wilson

    In spite of these all time low rates, the share of loans over 120 days delinquent just hit a 21 year high. This is also double the rate hit at the peak of the last cycle in 2009.

    There is a great deal of denial some people have about the magnitude of the economic hit coming down the pipe when the stimulus & foreclosure/eviction moratoriums end.

    • Posted by Inquisitive

      How much of that 1.4% are borrowers taking advantage of forbearance plans? Who, once the forbearance period is over, will just resume paying their mortgage? What’s happening now is likely not an apples to apples comparison to 2008-09. If the 1.4% does not include borrowers in forbearance, then that would be quite alarming/troublesome.

      • Posted by wilson

        I would not have thought that people in forbearance plans would be included in the delinquent stats. But I did some digging and it appears you are correct. That number is 120 days of missed payments on a first mortgage for any reason including forbearance. I don’t know what the forbearance portion is of the total.

        Still, its 2x the peak of the last cycle and I’m sure some people are in forbearance strategically, choosing not to pay even though they could, but I’d guess that many in forbearance simply can’t make their payments.

  3. Posted by Doug

    How are jumbo refinance rates looking? Last I checked these were hard to come by.

    • Posted by Reemz

      I just finished my refinance on a jumbo loan for a condo in a large building. I got 3.25% which I locked in about a month ago. I’m assuming by now rates are a little lower but would be surprised if people are getting below 3% for a jumbo on a condo.

      • Posted by Doug

        3.25% was what I was quoted too a little under a month ago for a jumbo refinance. Was waiting to see if the jumbo refinance would catch up to new purchase conventional but who knows if that would ever happen.

        • Posted by Carpe Zeitgeist

          The jumbo refinances are slowly becoming available. I am starting the process on a 2.89% 30yr fixed for a sub $850k jumbo loan. I feel like availability will continue to expand into 2021.

  4. Posted by TBK

    This is the perfect time to build, just like in 2011-2012.

    I bet you could get a similar construction loan in the low 2’s that rolls into a permanent 30yr loan, keeping the same rate and allowing interest only payments for up to 10 years. Even though the rate will be variable, it’ll most likely be less than any investment returns and, more importantly, let you keep the monthly payments to a minimum since you won’t be paying any of the principal.

    Granted, this doesn’t make sense if you intend on staying in the house for more than 15 years, but that was never an option for us after moving to SF.

    • Posted by soccermom

      There is not currently a surplus of construction labor and materials. Both were easily available in the pit of the Great Financial Crisis. Now it’s difficult to source materials, difficult for labor to work safely, and there are lots of nest-feathering projects competing for work. If the market falls off a cliff and we have a vaccine, it could be a good time to build, but it is not ‘cheap’ to do so now.

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