In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 7.22 per cent, down from last week when they stood at 7.29 per cent. A year ago, the average rate was 6.49 per cent.
Sam Khater, Freddie Mac’s chief economist, noted a rise in applications as rates continued their downward trajectory.
He said: “Market sentiment has significantly shifted over the last month, leading to a continued decline in mortgage rates.
“The current trajectory of rates is an encouraging development for potential homebuyers, with purchase application activity recently rising to the same level as mid-September when rates were similar to today’s levels. The modest uptick in demand over the last month signals that there will likely be more competition in a market that remains starved for inventory.”
The 15-year fixed rate mortgage averaged 6.56 per cent, down from 6.67 last week. A year ago, the average stood at 5.76 per cent.
Rates drops to 10-week low
A separate weekly survey from the Mortgage Bankers Association (MBA) noted that rates had also dropped.
The MBA reported that the average rate for 30-year fixed rate mortgages fell to 7.37 per cent, down from last week’s 7.41 per cent. The average rate for the 15-year equivalent fell to 6.88 per cent from 6.89 per cent last week.
Meanwhile, overall mortgage applications increased marginally by 0.3 per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates decreased for the fourth time in five weeks, with the 30-year fixed rate dipping to 7.37 percent, the lowest level in 10 weeks. There was a slight increase in applications overall, driven by a five per cent increase in purchase applications, but refinance applications decreased over the week.
“Rates have declined more than 50 basis points over the past six weeks, which has helped to spur a small increase in purchase applications, but activity last week was still around 20 per cent lower than a year ago. The purchase market remains depressed because of the ongoing, low supply of existing homes on the market. Similarly, refinance activity will likely be muted for some time, even with the recent decline in rates, as many borrowers locked in much lower rates in 2020 and 2021.”
