Mortgage Rates Fall to New Lows Amid Continued Uncertainty

Mortgage rates fell to new lows this week, as broad market uncertainty continues to keep downward pressure on rates.

Even as the stock market has improved in recent weeks – normally prompting an upward move in mortgage rates – the still-uncertain outlook for the economy and seemingly low risk of inflation has kept bond yields in check, with mortgage rates following suit and slowly making their way to new all-time lows. But despite recent improvements, rates are still not nearly as low as the bond market would suggest they should be. This is explained -- in part -- by the tight lending restrictions in the mortgage industry. Borrowers with great credit who are seeking a straightforward loan are being quoted at significantly lower rates than less creditworthy borrowers, resulting in a range of rates that tells a broader story than just the average.

Looking ahead, it’s unlikely that this dynamic of low overall rates and a wide range of quotes will change until there is more substantial progress with the coronavirus and broader economy.