In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.42 per cent, down from last week when it stood at 6.6 percent. A year ago, the average was 4.42 per cent.
Alongside the fall in rates, Freddie Mac also noted that demand from buyers was growing, despite the turmoil in the banking sector.
Sam Khater, Freddie Mac’s chief economist, said: “Mortgage rates continued to slide down as financial market concerns came to the fore over the last two weeks.
“However, on the homebuyer front, the news is more positive with improved purchase demand and stabilising home prices. If mortgage rates continue to slide over the next few weeks, look for a continued rebound during the first weeks of the spring homebuying season.”
Meanwhile, the 15-year fixed rate mortgage averaged 5.68 per cent, down from last week when it averaged 5.9 per cent. A year ago at this time, the average was just 3.63 per cent.
Rates down, applications up
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 6.48 per cent from 6.71 per cent a week earlier, while the average rate for the 15-year equivalents fell to 6.02 per cent from 6.14 per cent a week ago. And, encouragingly, applications were also up.
Joel Kan, MBA’s vice president and deputy chief economist said: “Treasury yields declined last week, driven by uncertainty over the health of the banking sector and worries about the broader impact on the economy. Mortgage rates declined for the second week in a row, with the 30-year fixed rate dropping to 6.48 percent, the lowest level in a month.
“Both purchase and refinance applications increased for the third week in a row as borrowers took the opportunity to act, even though overall application volume remains at relatively low levels.”
