In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that the 30-year fixed rate mortgage average was 6.09 per cent, down from 6.13 per cent last week. A year ago, the average was just 3.55 per cent.
This means that rates have fallen by almost one per cent in the past three months.
Sam Khater, Freddie Mac’s chief economist said: “Mortgage rates inched down again, with the 30-year fixed-rate down nearly a full point from November, when it peaked at just over seven per cent.”
“According to Freddie Mac research, this one percentage point reduction in rates can allow as many as three million more mortgage-ready consumers to qualify and afford a $400,000 loan, which is the median home price.
Meanwhile, the 15-year fixed rate mortgage averaged 5.14 per cent, down from last week when it averaged 5.17 per cent. A year ago at this time, the 15-year fixed rate averaged 2.77 per cent.
Applications on the rise
A separate weekly survey from the Mortgage Bankers Association (MBA) also found the same trajectory for rates.
The MBA reported that the interest rate for 30-year fixed rate mortgages fell to 6.19 per cent from 6.20 per cent a week earlier, while the average rate for 15-year fixed rate mortgages also fell to 5.50 per cent from 5.54 per cent a week ago.
However, applications were down, falling by nine per cent from one week earlier. But the MBA highlighted that activity is likely to pick up in the spring and that there would be a return to a buyers’ market.
Joel Kan, MBA’s vice president and deputy chief economist said: “Mortgage rates declined for the fourth straight week and have now fallen almost 40 basis points over the past month.
“Overall application activity declined last week despite lower rates, which is an indication of the still volatile time of the year for housing activity. Purchase activity is expected to pick up as the spring homebuying season gets underway, bolstered by lower rates and moderating home-price growth. Both trends will help some buyers regain purchasing power.”
