November 19, 2020
The announcement of a successful COVID-19 vaccine has reversed the steady trend of falling mortgage rates, showing how sensitive rates are to the progression of the pandemic.
Both 15 and 30-year mortgage rates rose slightly last week following Pfizer’s announcement of their successful COVID-19 vaccine.
On November 9, news broke that the pharmaceutical company had developed a vaccine that is allegedly 95% effective and potentially ready for public distribution within just a few months. Three days later (on the week ending November 12), 15-year, 30-year and 5-year hybrid ARM mortgage rates rose, breaking the streak of progressively falling interest rates.
The 15-year mortgage increased by 0.6 points, while the 30-year rose by 0.7 points. Even with this rise, however, mortgage rates remain lower year-over-year, as the 30-year rate now sits at 2.84% compared to last year’s 3.75%, according to the Freddie Mac Mortgage Loan Company.
Before Pfizer’s announcement, mortgage rates were steadily lowering as the year progressed. The news of Pfizer’s successful vaccine indicates that the economy is soon likely to improve, in which case such low mortgage rates will no longer be necessary. As for now, home buying trends are not likely to be affected by this rise in mortgage rates. Rates still remain close to record-low levels, and experts expect these rates to stay low in the near-term.
Marissa Saldivar // CIRB Journalism Intern // email@example.com