In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 6.67 per cent, down from last week when it was 6.69 per cent. A year ago, the average was 5.81 per cent.
The continued fall in mortgage rates has been welcomed by the organisation, but Sam Khater, Freddie Mac’s chief economist noted that the scarcity of housing stock was still a big issue.
“Mortgage rates slid down again this week but remain elevated compared to this time last year,” he said. “Potential homebuyers have been watching rates closely and are waiting to come off the sidelines. However, inventory challenges persist as the number of existing homes for sale remains very low. Though, a recent rebound in single-family housing starts is an encouraging development that will hopefully extend through the summer.”
The 15-year fixed rate mortgage also fell, averaging 6.03 per cent, down from 6.10 per cent last week. A year ago the average was 4.92 per cent.
Rates down, applications up…but only slightly
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 6.73 per cent from 6.77 per cent a week earlier, while the average rate for the 15-year equivalents rose marginally to 6.26 per cent, from 6.25 per cent last week.
Meanwhile, mortgage applications grew by 0.5 per cent from one week earlier, however, the MBA also highlighted the low levels of available inventory.
Joel Kan, MBA’s vice president and deputy chief economist said: “The 30-year fixed mortgage rate declined for the third consecutive week to 6.73 per cent, while other mortgage rates saw mixed results. Purchase applications increased.
“First-time homebuyers account for a large share of purchase loans, and this increase is a sign that while buyer interest is there, activity continues to be constrained by low levels of affordable inventory. Refinance applications continued their decline after the previous week’s increase, with the refinance share of applications just below 27 per cent.”
