(Bloomberg) -- Mortgage rates are searching for the floor.
The average for a 30-year fixed loan fell to 2.98%, hitting a record low for the third straight week and the seventh time since the coronavirus outbreak began roiling financial markets.
Rates have tumbled to the lowest level in almost 50 years of record-keeping by Freddie Mac (OTC:FMCC) as the Federal Reserve holds its benchmark rate near zero and buys mortgage bonds as part of its plan to stimulate the economy.
The low rates have fueled demand for homes, propping up prices and helping the housing market hold up better than expected amid the economic fallout from the pandemic.
“It’s not a silver bullet for the economic woes we’re experiencing, but it’s night-and-day different than what the housing market was looking like during the last recession,” said Ralph McLaughlin, chief economist for Haus, a co-investment platform for homebuyers.
In May, when the Federal Reserve started buying lower-coupon mortgage securities, analysts predicted that rates could drop below 3%. Now, there’s speculation that the slide could continue.
Earlier this week, JPMorgan Chase (NYSE:JPM) & Co. Chief Executive Officer Jamie Dimon said the costs of originating and servicing loans, including rules and regulations, are keeping rates high.
“We’ve been very consistent that mortgages, believe it or not, are far more costly than they should be,” Dimon said on a conference call.
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