Homebuyers are likely to see affordability increasing this spring buying season. According to the latest Freddie Mac Primary Mortgage Market Survey, mortgage rates moved lower by 0.4 points compared with last week to 4.28 percent. The 30-year fixed-rate mortgage during the same period a year ago stood at 4.45 percent.
The declining mortgage rates coupled with a softening of home price growth are likely to improve affordability for homebuyers, according to Sam Khater, Chief Economist, Freddie Mac.
“Mortgage rates have dipped quite dramatically since the start of the year and house prices continue to moderate, which should help on the homebuyer affordability front,” Khater said. “The combination of improving affordability and more inventory than the last few spring selling seasons should lead to improved home sales demand.”
The survey indicated that the 15-year fixed-rate mortgage was also down to 3.71 percent from last week when it averaged 3.76 percent. A year ago at this time, the 15-year fixed-rate mortgage stood at 3.91 percent. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) remained unchanged from the prior week at 3.84 percent. However, ARM was trending higher than the same period a year ago when it stood at 3.68 percent.
Rates are likely to fall further according to Danielle Hale, Chief Economist at Realtor.com. “Mortgage rates fell again this week to 4.28 percent and have yet to fully account for yesterday’s Fed's announcement,” she said. “Looking ahead to next week, we could see rates fall even further based on the decision to hold rates steady combined with guidance that emphasized patience.”
Additionally, she said that the strong economy along with a “job market that's finally yielding wage gains is a big plus for buyers” and these macroeconomic factors coupled with lower mortgage rates were likely to “ensure a steady stream of demand for sellers this spring.”