The 30-year fixed-rate mortgage (FRM) dropped from 4.07% to 4.06% week-over-week, according to Freddie Mac’s Primary Mortgage Market Survey. A year ago at this time, the 30-year FRM averaged 4.66%.
“Mortgage rates fell for the fourth consecutive week and continued the medium-term trend of lower rates since late 2018,” said Freddie Mac Chief Economist Sam Khater. “The drop in mortgage rates is causing purchase demand to rise and the mix of demand is skewing to the higher end as more affluent consumers are typically more responsive to declines in rates.”
The 15-year FRM averaged 3.51% with an average 0.4 point, down from the previous week when it averaged 3.53%. A year ago at this time, the 15-year FRM averaged 4.15%.
According to realtor.com Chief Economist Danielle Hale, April’s data indicates potential increases later in the year
“Mortgage rates slipped again this week to 4.06% and remain more than a half percentage point below where they were last year. Trade and economic uncertainty have driven investors to safe haven investments, which have kept mortgage rates low and may also explain why they have yet to spark a pick-up in home sales,” Hale said. “While lower mortgage rates could potentially help buyers stretch their budget, higher prices nationwide nearly exactly offset today’s rate advantage. But there’s another factor at play, earnings, which are up 3.2% and coupled with roughly even mortgage payments, this gives buyers an affordability advantage over last year.”
According to Fannie Mae's Economic and Strategic Research Group's (ESR's) May outlook, leading indicators for housing continued to suggest a "solid spring homebuying season," with the ESR revising its forecast for the second quarter and the rest of the year upwards for housing.
Echoing this sentiment, Freddie Mac kept its positive outlook on the housing industry unchanged in its May forecast citing "positive impact of low mortgage rates, a strong labor market, low unemployment, and modest wage growth," as some of the leading factors that would leave a positive impact on the market.