In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.28 per cent, down from last week when it stood at 6.32 percent. A year ago, the average was 4.72 per cent.
However, despite the drop in rates, which have been on the slide for the last month, the housing market is not receiving its usual springtime boost.
Sam Khater, Freddie Mac’s Chief Economist said: “Mortgage rates continue to trend down entering the traditional spring homebuying season.
“Unfortunately, those in the market to buy are facing a number of challenges, not the least of which is the low inventory of homes for sale, especially for aspiring first-time homebuyers.”
Meanwhile, the 15-year fixed rate mortgage averaged 5.64 per cent, a slight uplift from last week when it averaged 5.56 per cent. A year ago at this time, the average was just 3.91 per cent.
No spring break for the US housing market
A separate weekly survey from the Mortgage Bankers Association (MBA) also found the same trajectory for 30-year rates and their 15-year equivalents.
The MBA reported that the interest rate for 30-year fixed rate mortgages dropped to 6.40 per cent from 6.45 per cent a week earlier, while the average rate for the 15-year equivalents rose to 5.97 per cent from 5.84 per cent a week ago.
Alongside Freddie Mac, the MBA also pointed out that falling 30-year rates had not moved the market forward.
Mike Fratantoni, MBA’s SVP and Chief Economist said: “Spring has arrived, but the housing market is missing the customary burst in listings and purchase activity that typically mark the season. After four weeks of increasing purchase application activity, volume declined a bit this week even with another small drop in mortgage rates.
However, Fratantoni was more optimistic about the long-term outlook.
He added: “We do expect strong demand from first-time homebuyers over the next several years given the large number of millennials hitting peak first-time homebuyer age, but affordability remains a real challenge in this environment.”
