In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 7.29 per cent, down from last week when they stood at 7.44 per cent. A year ago, the average rate was 6.58 per cent.
While Sam Khater, Freddie Mac’s chief economist, highlighted the drop in rates, he also noted that homebuyers were still holding out on purchases.
He said: “Mortgage rates continued to decrease [into the] Thanksgiving holiday. In recent weeks, rates have dropped by half a per cent, but potential homebuyers continue to hold out for lower rates and more inventory. This dynamic is reflected in the latest data showing that existing home sales have fallen to a 13-year low.”
The 15-year fixed rate mortgage averaged 6.67 per cent, down from 6.76 last week. A year ago, the average stood at 5.9 per cent.
Applications at lowest level since 1995
A separate weekly survey from the Mortgage Bankers Association (MBA) noted that rates had also fallen while applications were marginally up.
The MBA reported that the average rate for 30-year fixed rate mortgages fell to 7.41 per cent, down from last week’s 7.61 per cent. The average rate for the 15-year equivalent fell to 6.89 per cent from 6.94 per cent last week.
Meanwhile, mortgage applications increased by three per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “US bond yields continued to move lower as incoming data signalled a softer economy and more signs of cooling inflation. Most mortgage rates in our survey decreased, with the 30-year fixed mortgage rate decreasing to 7.41 per cent, the lowest rate in two months.
“Mortgage applications increased to their highest level in six weeks but remain at very low levels. Refinance applications increased 1.6 per cent last week, but the level of refinances continues to be well below historical averages, given that most borrowers already have a rate well below current market rates.”
