In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.69 per cent, down from last week when it stood at 6.71 per cent. A year ago, the average was 5.78 per cent.
The fall in mortgage rates can be put down to the expected pause in rate increases from the Federal Reserve and slowing inflation, according to Sam Khater, Freddie Mac’s chief economist.
“Mortgage rates decreased slightly this week in anticipation of the pause in rate hikes by the Federal Reserve,” said Sam Khater, Freddie Mac’s chief economist. “As inflation continues to decelerate, economic growth is slowing and the tightening cycle of monetary policy is reaching its apex, which means mortgage rates are expected to decrease later this year and into next.”
The 15-year fixed rate mortgage rose slightly from last week, averaging 6.10 per cent, up from 6.07 per cent last week. A year ago the average was 4.81 per cent.
Rates down, applications up
A separate weekly survey from the Mortgage Bankers Association (MBA) also saw rates fall.
The MBA reported that the average rate for 30-year fixed rate mortgages decreased to 6.77 per cent from 6.81 per cent a week earlier, while the average rate for the 15-year equivalents remained static at 6.25 per cent.
Meanwhile, mortgage applications grew by 7.2 per cent from one week earlier but housing stock remains an issue for homebuyers.
Joel Kan, MBA’s vice president and deputy chief economist said: “Mortgage rates declined for the second straight week, with the 30-year fixed rate decreasing to 6.77 per cent. Mortgage applications were up over the week, but remained well below levels from a year ago.
“Rates that are still more than a percentage point higher than a year ago, and low for-sale inventory continue to constrain homebuying activity in many markets. The average loan size on a purchase loan decreased for the third straight week, as we continue to see more first-time homebuyer activity in the purchase market.
