Mortgage rates fall below 3%

More conversation from Federal Reserve Chairman Jerome Powell has been seen another historic drop in mortgage rates, which have come to an all-time low under 3%.

In two days of testimony to Congress this week the leader of America’s central bank said the economy faces an “extraordinarily uncertain” recovery from the coronavirus pandemic.

Infections have been rising rapidly, and many states have stopped their reopening plans.

But while Powell raises the concern, the Fed’s policies that have pushed mortgage rates deep into the bargain bin appear to be working some magic on the economy. The housing market is rebounding and could lead the U.S. out of its COVID-19 recession, experts say.

How low have mortgage rates gone?

Mortgage rates dipped on Tuesday to an average 2.94% for a 30-year fixed-rate mortgage, and that ties an all-time low reached in mid-June, says Mortgage News Daily.

For rates these days, it’s “all about the coronavirus,” says Matthew Graham, chief operating officer of MND.

“If it looks like the economy can slowly lurch back to business, rates will feel pressure to move higher,” he writes. “If it looks like coronavirus retains the upper hand, rates could continue inching toward more all-time lows.”

Today’s dirt-cheap mortgage rates have helped put a fire under the housing market.  Home sales under contract have gone up by a record 44% from April to May, following two months of declines related to the pandemic.

This has been an amazing recovery for contract signings, and shows the resiliency of consumers and the pure desire for homeownership.

This bounce back also shows the housing sector could lead the way for a larger economic recovery.

Fed chief Powell welcomes the signs of recovery, but he says the economy is still fragile.

“We have entered an important new phase and have done so sooner than expected,” he told lawmakers in remarks prepared for hearings Monday and Tuesday. “While this bounce back in economic activity is welcome, it also presents new challenges — notably, the need to keep the virus in check.”

Can you get a mortgage rate under 3%?