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Mortgage rates hit another all-time low

Yahoo Finance's Akiko Fujita and Dhara Singh discuss mortgage trends amid the coronavirus pandemic.

Video Transcript

AKIKO FUJITA: Mortgage rates hit a new low yet again this week. That is the 11th time this year. That has helped fuel the red hot housing market. But with limited inventory, how sustainable is the momentum? Let's bring in Dhara Singh. She has been tracking that story for Yahoo Finance. And Dhara, let's start by talking about these record low rates. How many people are actually taking advantage of that right now?

DHARA SINGH: Akiko, well, currently, 18.5 million homeowners are here to take advantage of these low mortgage rates. That many people can shave off 0.75% of a point from their mortgage rate, and that translate to $304 a year. So it's a great opportunity.

And, you know, you hear a lot about this. This is the 11th time this year, but can everyone take advantage of this? That's not the case. There's a multitude of different reasons, starting off with inventories already pretty low. And now that these rates are so low, a lot of lenders are also worried that, you know, as jobless claims go up, will they be able to protect themselves?

Therefore, believe it or not, even for loans, such as FHA loans, which you and me both know they're for lower credit borrowers, normally you'd be able to secure a loan at, like, 580. But now that number goes up to a credit score of mid 600. So we're seeing a lot of strict lending standards there.

AKIKO FUJITA: To that point you made about the inventory being very limited, we've got those new existing home sales numbers, up 9 and 1/2%, much higher than expected, in September. You know, that seems to point to the demand and supply picture not really being able to meet each other. How much longer do you think this momentum can continue?

DHARA SINGH: Honestly, so from the extras that I've talked to, they said that, hey, you're out of space now. Where you have low interest rates and housing values, as you and me both know, they're increasing. You know, it's not to say there's a lot of affordable housing out there. So for a limited time, these low interest rates will be able to offset those housing values. But it won't be for long. So if you're considering refinancing, [INAUDIBLE] that now might be the time.