In its latest Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac) revealed that 30-year fixed rate mortgages averaged 7.03 per cent, down from last week when they stood at 7.22 per cent. A year ago, the average rate was 6.33 per cent.
However Sam Khater, Freddie Mac’s chief economist, highlighted that the drop in rates had not helped push a rise in applications.
He said: “The 30-year fixed-rate mortgage averaged near seven per cent this week, down from nearly 7.80 per cent just six weeks ago.
“When rates began to rapidly drop, purchase applications rebounded initially, but this improvement in demand diminished in the last week. Although these lower rates remain a welcome relief, it is clear they will have to further drop to more consistently reinvigorate demand.”
The 15-year fixed rate mortgage averaged 6.29 per cent, down from 6.56 last week. A year ago, the average stood at 5.67 per cent.
Remortgage applications see strongest week in two months
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 7.17 per cent, down from last week’s 7.37 per cent. The average rate for the 15-year equivalent fell to 6.80 per cent from 6.88 per cent last week.
Meanwhile, overall mortgage applications increased by 2.8 per cent from one week earlier.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates declined last week, with the 30-year fixed rate mortgage falling to 7.17 per cent – the lowest level since August 2023. Slower inflation, and financial markets anticipating the potential end of the Fed’s hiking cycle, are both behind the recent decline in rates.
“Refinance [remortgage] applications saw the strongest week in two months, increasing on a year-over-year basis for the second consecutive week for the first time since late 2021. The overall level of refinance applications is still very low, but recent increases could signal that 2023 was the low point in this cycle for refinance activity, consistent with our originations forecast. Purchase applications remained 17 per cent lower than a year ago, held back by low inventory and still-challenging affordability conditions.”
