An elegant white clock featuring 'DANIELLE LAZIER REAL ESTATE LOGO' on a sleek black background.Vivre Real Estate logo

Mortgage Rates Hit All-Time Low

March 7, 2020

This week, mortgage rates hit an all-time low. Maybe you’ve heard, it’s big news. On March 5th, 2020, the national average interest rate for a 30-year fixed mortgage clocked in at 3.29%. That’s the lowest recorded rate in the almost 50 years since Freddie Mac began keeping track in 1971. It's a momentous occasion—historic, even.

Before reaching the current low, mortgage rates began to fall during the global economic crisis of 2007-2008. Rates started 2007 well above 6% and averaged about 5% in 2008. By November 2012, they reached the previous historic low of 3.31%. After bumping back up to mid-3 and 4% in subsequent years, rates again began to drop in 2019. In a nutshell, buyers shopping for a mortgage have had it good for quite a while now.

Of course, there’s other, bigger, more somber news these days. The risk of global pandemic is wreaking economic havoc and pushing rates even lower. It goes without saying that these record-low rates aren’t exactly cause for celebration. Like the rate cuts that followed the Great Recession, today’s boon for borrowers follows another worldwide emergency. The novel coronavirus, or COVID-19, dominates the headlines. It’s impossible to avoid, and for good reason: in times like these, it’s best to stay informed.

In that vein, we thought we’d take a look at how the spring real estate market is shaping up. While we can’t predict the future, we are informed by indicators like historically low mortgage rates and the current state of the market.

Record-Low Mortgage Rates

Here’s the good news: When rates are low, both buyers and sellers win. Today’s all-time low average mortgage rates mean buyers can spend more on the principal of their loan instead of the interest. They can be approved for a larger loan, enabling them to buy “more house” with the same savings and income. Additionally, some would-be buyers who couldn't afford to buy a San Francisco home may finally get the chance they’ve been waiting for.

  • $500,000 loan at 4.29%
    • Total cost of mortgage: $889,712
    • Monthly payments: $2,471
  • $500,000 loan at 3.29%
    • Total cost of mortgage: $787,328
    • Monthly payments: $2,187

As you can see, mortgage rates greatly impact both monthly payments and the total cost of a 30-year fixed-rate mortgage.

The benefits of today’s all-time low mortgage rates extend to existing homeowners and sellers as well. When more buyers are shopping with more money to spend, listings receive more interest and competition. That means better outcomes for sellers. Existing homeowners can win by refinancing. Analytics firm Black Knight recommends refinancing on any loan that’s at least 0.75% higher than the current average. There are some associated costs, but you’ll save thousands more if you can refinance to a significantly lower rate.

In a vacuum, reaching the historical low mortgage rate could be considered great for everyone. It benefits buyers, sellers and existing homeowners. But, unfortunately, there are extenuating circumstances to consider.

Enter Coronavirus: Disease and Unease

Unlike low mortgage rates, the effects of a possible global pandemic on San Francisco real estate are a bit harder to guess. What we do know is that COVID-19 is very likely to spread further throughout the country. Fears will heighten, schools may shut. The ultimate toll that the virus might take on our country’s populace is unknown, but it is expected to be significant. The economy will also take a hit, and it already has.

We also know that the San Francisco real estate market has been largely unaffected so far. Buyers and sellers who are motivated by external circumstance (ie. a new marriage, new baby, new job, death divorce, etc.) are still participating in business as usual. The most affluent sellers with who are in no real rush may elect to wait, and if the disease fizzles things may stay the same in the short and long term. If the situation gets worse, things may change..

Around the world, stock markets are plunging as business has crawled to a halt in some regions and industries. Despite lower rates, buyers whose down payments or reserves are in stock may actually have less buying power. If the virus spreads widely throughout the United States, the San Francisco real estate industry may also slow. Open house events at San Francisco homes for sale will be less populated during a pandemic. On the other hand, foreign investors are reportedly eyeing US real estate as an even safer investment than before the virus broke out. Call it a silver lining to a very grey cloud.

For now, San Francisco real estate is still chugging along. Homeowners, buyers and sellers alike can take advantage of historically low mortgage rates. Those are good things. If you’re interested in buying or selling a San Francisco home, or if you need a recommendation for a trusted San Francisco mortgage lender, let us know. We’re happy to help. Most importantly, follow the CDC’s guidelines for disease prevention, and take good care of yourself.

Yelp logo
296 reviews
View All
Zillow logo
176 reviews
View All
Danielle Elazier Realtor on Google My Business- image of Google my business logo
117 reviews
View All

WORK WITH US

Are you looking to buy a luxury home or sell your exclusive property? Our top real estate team specializes in luxury condos, estates, and high-end properties. With years of experience navigating the competitive luxury real estate market, we offer personalized guidance every step of the way.

Contact us today for a complimentary consultation. Whether you’re looking for luxury homes for sale or need help listing your exclusive property, our top-rated realtors are here to help. Find your dream home or achieve your sales goals with the best real estate agents!
Contact Me

SIGN UP FOR OUR NEWSLETTER

Stay informed with our twice-monthly email updates, featuring market insights, new listings, and local news. Subscribe to receive the latest in San Francisco luxury real estate and more. We respect your privacy and never share your information.

Danielle Elazier botanical illustration - 3 different California poppy flower branches. Black and white with line art
WATCH DANIELLE’S LATEST VIDEOS

DISCOVER LUXURY LIVING IN SAN FRANCISCO

YouTube Channel
View Full Street Address SAN FRANCISCO, CA 94114 (415) 528-7355 ©2024 VIVRE REAL ESTATE. ALL MATERIAL PRESENTED HEREIN IS INTENDED FOR INFORMATION PURPOSES ONLY. WHILE THIS INFORMATION IS BELIEVED TO BE CORRECT, IT IS REPRESENTED SUBJECT TO ERRORS, OMISSIONS, CHANGES, OR WITHDRAWAL WITHOUT NOTICE. ALL PROPERTY INFORMATION, INCLUDING, BUT NOT LIMITED TO SQUARE FOOTAGE, ROOM COUNT, NUMBER OF BEDROOMS, AND THE SCHOOL DISTRICT IN PROPERTY LISTINGS SHOULD BE VERIFIED BY YOUR OWN ATTORNEY, ARCHITECT, OR ZONING EXPERT. IF YOUR PROPERTY IS CURRENTLY LISTED WITH ANOTHER REAL ESTATE BROKER, PLEASE DISREGARD THIS OFFER. IT IS NOT OUR INTENTION TO SOLICIT THE OFFERINGS OF OTHER REAL ESTATE BROKERS. WE COOPERATE WITH THEM FULLY. EQUAL HOUSING OPPORTUNITY. ALL INFORMATION DEEMED RELIABLE BUT NOT GUARANTEED AND SHOULD BE INDEPENDENTLY REVIEWED AND VERIFIED.
enteruserclockmagnifiercross