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Mortgage rates have never been this low. Freddie Mac reported on July 16th that the average 30-year fixed-rate mortgage fell below the 3% mark to just 2.98%. That’s the lowest they’ve been in the 50 years that rates have been tracked. Those low rates are great for buyers, but they are also the results of the current crisis.

 

Mortgage rates tend to drop when investors pour money into the 10-year U.S. Treasury bond. When there’s more demand from investors buying up Treasurys, bond prices rise as yields go down (just like in real estate, when prices rise and cash flows decline). Investors who typically buy bonds also buy mortgage-backed securities for the same reason -- for safety, even if the return is lower.