Mortgage rates fell again this week, with the average rate on a 30-year fixed loan falling to 6.23% from 6.35% the week before. It’s the second weekly drop in mortgage rates in a row and the largest since July of last year. Fannie Mae economist Andrew Searle said he expects existing home sales will increase by 15% this year due to continued low mortgage rates, which could be bad news for homeowners who are thinking of selling their property because they won’t be able to fetch as much money as they would have otherwise received if they had waited just another few months until after the peak selling season ends in June.
Mortgage rates fall in the largest weekly drop since July
Mortgage rates fell to their lowest level in more than five years this week, as Freddie Mac chief economist Frank Nothaft predicted they would remain low enough through the spring to give potential home buyers an incentive to step into the market.
The average rate on a 30-year fixed loan fell to 6.23%, down from 6.31% last week and 6.35% a year ago, Freddie Mac said Thursday. The rate has been falling since June, when it was at 5%. Mortgage rates have not been this low since May 2013 (5%).
Rates on 15-year loans also fell: They averaged 5%, down from 5% last week and 4% a year ago; 10-year adjustable mortgage rates dropped to 4%, from 4 1/4%.
The average rate on a 30-year fixed loan fell to 6.23% this week
The average rate on a 30-year fixed loan fell to 6.23% this week, the largest weekly drop since July and the first time it’s dipped below 6.28% since June 1, according to mortgage-info website Freddie Mac. The average rate on a 15-year fixed loan fell to 5.24%, also a record low since Freddie Mac began tracking rates in 1971 but still above its record low of 4.66% set in 2013.
Mortgage rates have been falling steadily since they hit their highest levels in more than four years at the end of March amid fears that trade tensions would slow economic growth and damage home sales (paywall).
Freddie Mac chief economist Frank Nothaft predicted mortgage rates will remain low enough through the spring to give potential home buyers an incentive to step into the market.
The mortgage rate plunge is the largest week-to-week drop since July, when it fell by 0.39 percent. Freddie Mac chief economist Frank Nothaft predicted mortgage rates will remain low enough through the spring to give potential home buyers an incentive to step into the market.
“The housing market is recovering much more quickly than anyone expected,” Nothaft said in a statement released Monday. “We expect interest rates to remain low through next year which should help keep new construction going strong.”
Home sales jumped 2.5% in January to a seasonally adjusted annual rate of 5 million homes sold, according to the National Association of Realtors (NAR). The median price for existing homes rose 4% from December 2014 and 3% from January 2015 , according to NAR data reported by CNN Money .
Mortgage rates are falling, and that is good news for potential homeowners.
- Falling rates are good news for potential homeowners.
- Falling rates are also good news for current homeowners who want to refinance and lower their monthly payments.
- Falling mortgage rates are good news for banks and other mortgage lenders, who will be able to make more money on your loan by charging you less interest over time.
- And lastly, falling mortgage rates should be viewed as an indication that the economy is doing well; this makes sense because one of the main ways that people build wealth is through home ownership (and stocks) which both rely heavily on low interest rates in order to make investing affordable enough that it’s worth doing regularly.