According to Freddie Mac’s weekly Primary Mortgage Market Survey, fixed mortgage rates continued to decrease for the week ending Feb. 25.
“Since the beginning of 2016, 30-year rates have fallen almost 40 basis points helping housing markets sustain their momentum into this year,” said Sean Becketti, Freddie Mac’s chief economist.
Low rates may improve affordability. According to the survey, the average 30-year fixed-rate mortgage ticked down to 3.62% from the previous week’s average of 3.65%. A year ago, the average was 3.8%. The 15-year FRMs also decreased on a week-over-week basis. The average interest rate settled at 2.93%.
The typical 5-year Treasury-indexed hybrid adjustable-rate mortgage decreased to 2.79% from 2.85% the previous week.
“Yields on the 10-year Treasury continued their downward trend this week after a small rally the previous two weeks,” said Becketti, according to Freddie Mac. “The 30-year mortgage responded, falling 3 basis points to 3.62 percent.”
These low interest rates continue to improve affordability for all interested homebuyers and those looking to refinance a current home mortgage. This is especially helpful as demand continues to rise.
Demand for homes rises, but some mixed results remain. Thanks to still-low interest rates, some individuals may be more inclined to enter the housing market.
“Earlier this week, the National Association of Realtors announced existing home-sales were up 4 percent month-over-month in January and up 11 percent from last year,” noted Becketti.
However, Bankrate’s analysis of benchmark interest rates for a U.S. home mortgage showed mixed results on home sales. While existing home sales increased slightly from December to January, new home sales decreased by almost 10% from December to January.
“It was more of a surprise just because interest rates have fallen so low right after the Fed increase,” said Brett Sinott, the vice president of capital markets for CMG Financial, according to Bankrate.
No matter the future demand for housing – especially moving into the busy spring buying season – consumers looking to invest in a new home can feel good about low interest rates. By securing these rates now, buyers can ensure a great deal of savings over the life of the loan. The improving affordability makes the American Dream a reality for even more modern consumers.
Source: New Home Ambassador Blog