The 30-year fixed mortgage rate, the most popular loan product, fell to its lowest level on record this week, marking the 15th all-time low it hit this year.

According to the latest data released Thursday by Freddie Mac, the 30-year fixed rate average fell to 2.67% with an average of 0.7 points. Points are fees paid to a lender equal to 1% of the loan amount and are added to the interest rate. It was 2.71% a week ago and 3.73% a year ago.

The 30-year fixed rate has never been lower since Freddie Mac began tracking mortgage rates in 1971. It broke the previous low of 2.71%, set earlier in the month. For some context on how remarkably low rates are, since November 2018, when it was 4.94%, the 30-year fixed rate has fallen by more than 2.25 percentage points. At the start of 2000, the 30-year average was 8.15%.

Freddie Mac, the federally chartered mortgage investor, aggregates the rates of about 80 lenders across the country to get the national average weekly mortgage rates. It uses rates for high quality borrowers with strong credit scores and large down payments. These rates are not available to all borrowers.

Since the survey is based on home purchase mortgages, refinance rates may be higher. This is all the more true as the price adjustment for refinancing operations went into effect earlier this month. The adjustment is 0.5% of the loan amount. For example, it is $ 1,500 on a $ 300,000 loan and applies to all refinancings from Fannie Mae and Freddie Mac.

The 15-year fixed rate average fell to 2.21% with an average of 0.6 points. It was 2.26% a week ago and 3.19% a year ago. The average of the five-year revisable rates remained stable at 2.79% with an average of 0.3 points. It was 3.36% a year ago.

“The dynamics of mortgage rates in recent months have been less dependent on economic data and more on policy issues – both fiscal and monetary – as well as epidemiological developments,” said Matthew Speakman, Zillow economist. “A new spending program can put upward pressure on mortgage rates, especially if the package contains more than what would have been debated. . Overall, mortgage rates remain very low and are unlikely to change unless a successful spending program is adopted before the end of the year. “

The Federal Reserve met this week for the last time this year. As expected, the central bank did not raise the federal funds rate.

“The Federal Reserve reaffirmed [its] commitment to keep short-term rates at zero for the foreseeable future, noting the slowdown in economic growth due to the intensifying pandemic, ”said Mike Fratantoni, chief economist at the Mortgage Bankers Association. “We expect them to keep rates at the lower zero limit for years to come.”

But most observers were more interested in what the Fed intended to do, if anything, about its bond buying program. In recent months, the Federal Reserve has bought mortgage-backed securities – or MBS as they are often called – which are lots of mortgages sold in a secondary market. When a borrower takes out a loan such as a 30-year fixed rate mortgage, a lender often bundles that loan with other loans into an MBS and then sells it to investors. The Fed’s purchase of MBS helped lower mortgage rates.

Some feared that the central bank was slowing down its bond buying program. But in a post-meeting statement, he said that “until further substantial progress is made towards the committee’s maximum employment and price stability targets,” the Fed will continue to buy at least $ 120 million. dollars of bonds every month.

“While the Fed has been clear about its plans for the federal funds target, it has been less clear about asset purchases,” Fratantoni said. Wednesday’s announcement provided further commitment that they would continue to buy Treasuries and MBSs at the current rate until there is “substantial progress” towards a stronger economy. of vaccine distribution, we hope to see such progress during 2021. “

Bankrate.com, which publishes a weekly mortgage rate trend index, found that experts polled were almost evenly divided on the direction of rates over the coming week. About half predicted they would go up, nearly the other half said they would stay roughly the same, and a few expected them to go down.

Jim Sahnger, mortgage planner at C2 Financial, is one who expects them to remain stable.

“In the face of a number of negative factors affecting the economy, mortgage rates have remained consistently stingy, giving up a lot of ground from their all-time lows,” he said. “The 10-year Treasury has risen nearly 30 basis points over the past 90 days, but mortgage-backed securities have remained fairly stable. The Fed met this week and said it was ‘committed to it for the long haul and would do what is the interest rate complex until we meet the desired inflation and employment targets.