In its latest Primary Mortgage Market Survey, [1] Freddie Mac revealed a significant drop in mortgage rates across the board, which in turn has led to an increase in the share of mortgage applications.
“Mortgage rates fell to the lowest level in nine months, and in response, mortgage applications jumped more than 20 percent. Lower mortgage rates combined with continued income growth and lower energy prices are all positive indicators for consumers that should lead to a firming of home sales,” said Sam Khater, Chief Economist at Freddie Mac. [2]
For the week ending January 10, the 30-year fixed-rate mortgage (FRM) averaged at 4.45 percent, a drop from an average of 4.51 percent the week prior. The 30-year FRM averaged 3.99 percent around the same period last year. The 15-year FRM averaged at 3.89 percent, dropping from 3.99 percent the previous week. A year ago at this time, the 15-year FRM averaged 3.44 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) reflected an average of 3.83 percent with an average 0.3 point—down from last week when it averaged 3.98 percent. Around the same period a year ago, the 5-year ARM averaged 3.46 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
“Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Borrowers may still pay closing costs which are not included in the survey,” the report indicated.