Falling mortgage rates are creating a surprising and welcome scenario for the housing market as springtime looms, and as tight inventories are still pushing up prices in many communities.
Rates on a 30-year fixed-rate mortgage were at near-record lows of 3.62 percent Thursday, down from 4.01 percent at the end of December, according to the weekly survey by mortgage lender Freddie Mac.
The all-time record low for the 30-year loan is 3.31 percent set during the week of November 21, 2012.
The decline has surprised many housing marketing observers an experts, who predicted that mortgage costs would start rising soon after the Federal Reserve raised its benchmark short-term borrowing rate in December.
But volatility in the financial markets over the last few weeks has helped keep rates down and improved affordability for prospective buyers. Yields on the 10-year Treasury resumed their downward trend this week after a brief rally the previous two weeks.
“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, chief economist, Freddie Mac.
Earlier this week, the National Association of Realtors said existing home-sales were up 4 percent month-over-month in January and up 11 percent from last year, he added.
Here is Freddie Mac’s rundown on mortgage rates this week:
30-year fixed-rate mortgage (FRM) averaged 3.62 percent, with an average 0.6 point for the week ending February 25, 2016, down from last week when it averaged 3.65 percent. A year ago at this time, the 30-year FRM averaged 3.80 percent.
15-year FRM this week averaged 2.93 percent, with an average 0.5 point, down from last week when it averaged 2.95%. A year ago at this time, the 15-year FRM averaged 3.07 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.79 percent this week, with an average 0.5 point, down from last week when it averaged 2.85 percent. A year ago, the 5-year ARM averaged 2.99 percent.