【Zillow】Coronavirus Fears Push Mortgage Rates to 7-Year Lows

Mortgage rates fell to new lows this week, as fears of further, unchecked spread of the coronavirus kept investors, and the Federal Reserve, in search of safety and stimulus. A week full of otherwise blockbuster political and economic news was still not enough to knock the coronavirus from its perch at center stage, where it dictated market movements to a historic degree.

The stock market underwent it fastest correction in history, losing more than 10% of its value in just six days as investors fled to the security of bonds and other safer assets. This flight to safety pushed bond yields to historic lows – the ten-year Treasury note which dipped below 1% for the first time in history. And while the response of mortgage rates was again relatively muted given the dramatic fall in yields, mortgage rates did ultimately decline notably, touching their lowest level in more than seven years over the past few days. Much remains unknown with this virus and its potential impact on human life and economic activity.

Friday’s February jobs report should offer some insight into how employers were bracing for impact last month as initial reports of the virus’s spread began to surface, and coming reports in the next few weeks will offer evidence of how consumers are digesting the news. Regardless, COVID-19 is here, and it will continue to be the main driver of mortgage rate movements in the coming weeks.

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