The 30-year fixed-rate mortgage averaged 4.06 percent this week, ending March 28, 2019, down from last week when it averaged 4.28 percent. That drop of 22 basis points is the biggest one-week decline in a decade, says Freddie Mac.
A year ago at this time, the 30-year fixed-rate mortgage averaged 4.40 percent. The potential of slowdown of the U.S. economy is a factor.
“The Federal Reserve’s concern about the prospects for slowing economic growth caused investor jitters to drive down mortgage rates by the largest amount in over ten years,” says Sam Khater, Freddie Mac’s chief economist. “Despite negative outlooks by some, the economy continues to churn out jobs, which is great for housing demand.”
Lower rates could be what the housing market needed for a jolt in demand. Khater added that home sales have started “to recover and with this week’s rate drop we expect a continued rise in purchase demand.”
Closed home sales increased significantly in February, compared with January — but they are still lower year-over-year.
In many regions, homebuyers are still looking at higher home prices and a low supply of homes for sale. While lower mortgage rates can propel a potential homebuyer into the market, the reason behind lower rates — mainly a weaker economy — can also deflate consumer confidence and keep those buyers on the fence.
Here is a rundown of Freddie Mac’s weekly update on mortgage rates:
- 30-year fixed-rate mortgage (FRM) averaged 4.06 percent with an average 0.5 point for the week ending March 28, 2019, down from last week when it averaged 4.28 percent. A year ago at this time, the 30-year FRM averaged 4.40 percent.
- 15-year FRM this week averaged 3.57 percent with an average 0.4 point, down from last week when it averaged 3.71 percent. A year ago at this time, the 15-year FRM averaged 3.90 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.75 percent with an average 0.3 point, down from last week when it averaged 3.84 percent. A year ago at this time, the 5-year ARM averaged 3.66 percent.