In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.6 per cent, down from last week when it averaged 6.73 per cent. A year ago, the average was 4.16 per cent.
Freddie Mac highlighted the disruptions in the market had pushed rates down, but it may only be temporary respite for Stateside borrowers.
Sam Khater, Freddie Mac’s chief economist, said: “Mortgage rates are down following an increase of more than half a percent over five consecutive weeks.
“Turbulence in the financial markets is putting significant downward pressure on rates, which should benefit borrowers in the short-term. During times of high mortgage rate volatility, homebuyers would greatly benefit from shopping for additional rate quotes.
“Our research concludes that homebuyers can potentially save $600 to $1,200 annually by taking the time to shop among multiple lenders.”
Meanwhile, the 15-year fixed rate mortgage averaged 5.9 per cent, down from last week when it averaged 5.95 per cent. A year ago at this time, the average was just 3.39 per cent.
Applications inch up but still historically low
A separate weekly survey from the Mortgage Bankers Association (MBA) also found that 30-year rates were falling, along with their 15-year equivalents.
The MBA reported that the interest rate for 30-year fixed rate mortgages dropped to 6.71 per cent from 6.79 per cent a week earlier, while the average rate for the 15-year equivalents fell to 6.14 per cent from 6.25 per cent a week ago. Mortgage applications were up on recent weeks, though way down on the same time a year ago.
Joel Kan, MBA’s vice president and deputy chief economist said: “Treasury yields declined late last week, as market concerns over bank closures and the potential for broader ripple effects triggered a flight to safety in Treasury bonds. This decline pushed mortgage rates for all loan types lower, with the 30-year fixed rate decreasing to 6.71 per cent.”
“Home purchase applications increased for the second straight week but remained almost 40 per cent below last year’s pace. While lower rates should buoy housing demand, the financial market volatility may cause buyers to pause their decisions.”
