Average 30-year fixed mortgage rates fell from 6.69 per cent last week to 6.63 per cent this week.
In the most recent Primary Mortgage Market Survey, the Federal Home Loan Mortgage Corporation (Freddie Mac), the data showed this was higher than the previous year’s average of 6.09 per cent.
Sam Khater, chief economist at Freddie Mac, said: “Although affordability continues to impact homeownership, the combination of a solid economy, strong demographics and lower mortgage rates are setting the stage for a more robust housing market.
“Mortgage rates have been stable for nearly two months, but with continued deceleration in inflation, we expect rates to decline further. The economy continues to outperform due to solid job and income growth, while household formation is increasing at rates above pre-pandemic levels. These favourable factors should provide strong fundamental support to the market in the months ahead.”
The average 15-year fixed mortgage rate dropped to 5.94 per cent, down from 5.96 per cent last week. This was higher than the average of 5.14 per cent seen a year ago.
Mortgage applications slide in the US mortgage market
A separate survey from the Mortgage Bankers Association (MBA) also pointed to a drop in the average 30-year fixed rates, but said applications had fallen by 7.2 per cent.
Application rates were adjusted to account for the Martin Luther King Day holiday.
The MBA reported that the average rate for a 30-year fixed rate mortgage was unchanged at 6.78 percent when compared to last week.
The average 15-year equivalent rose slightly to 6.34 per cent, up from 6.31 per cent.
Joel Kan, MBA’s vice president and deputy chief economist, said: “Mortgage rates changed little last week, with the 30-year fixed rate at 6.78 percent, which is close to where it has been for the past month, but lower than the recent peak of 7.9 percent in October 2023.
“Applications decreased compared to a holiday-adjusted week, driven by a decline in purchase applications that offset a slight increase in refinance activity. Low existing housing supply is limiting options for prospective buyers and is keeping home-price growth elevated, resulting in a one-two punch that continues to constrain home purchase activity.”
