403(b) Curriculum Library

Chart of the Month: 30-Year Mortgage Rates Hit Lowest Rate in History

Source: Federal Reserve Bank of St. Louis

Market Observations

Yields on U.S. government debt have meaningfully declined since the 1980’s, as the Federal Reserve tamed inflation. The sharp decline in rates has had a significant impact on mortgage rates, which tend to move in the same direction as U.S. bond yields. With renewed concerns about the recovery sending U.S. Treasury yields to record lows, the average rate on the 30-year fixed rate mortgage fell below 3.0% for the first time in the history of the series. A year ago, the average rate on the 30-year fixed rate mortgage stood at 3.81%. Today, it stands at an all-time low of 2.98%. Falling mortgage rates are beneficial for new home buyers and can often spur refinancing activity. However, with lending restrictions tightening and the unemployment rate elevated, it remains to be seen how much of an impact this will have on the real economy.

Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice. Opinions expressed are those of the author, and do not necessarily represent the opinions of Cammack Retirement Group.

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