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Interest rates on conventional purchase-money mortgages decreased from March, with the average interest rate on all mortgage rates falling to 4.20% in April, according to the Federal Housing Finance Agency (FHFA).
April’s rate is a 24-point drop from March’s 4.44%.
The report adds the average contract mortgage rate for the purchase of a previously occupied home was 4.15% for loans closed in April, which is a decrease of 21 points from 4.36% in March.
Average interest rates on conventional, 30-year, fixed-rate mortgages of $484,350 or less went down 22 points in April to 4.39%.
The effective interest rate on all mortgage loans was 4.31% in April, down 20 basis points from 4.51% in March.
The average loan amounts rose $9,600 in April to $334,700 from March’s average of $325,100.
The FHFA reported earlier this week that home prices rose 1.1% in Q1 2019 from Q4 2018, according to the latest Home Price Index.
“House prices have risen consistently over the last 31 quarters," said Dr. William Doerner, FHFA's Supervisory Economist. “Although price growth is still positive, the upward pace is softening across the country, especially among states with the largest supplies of housing."
The FHFA stated home prices rose in every state, but First American’s Real Home Price Index states affordability also increased for the first time since March 2016.
“In March, two main components of the RHPI swung in favor of increased affordability—continued strong household income growth and declining mortgage rates,” said First American Chief Economist Mark Fleming. “Nationally, affordability improved on a year-over-year basis for the first time since 2016.”
CoreLogic’s latest Case-Shiller home price index also predicted the continued decline of mortgage rates.
“The U.S. housing market moderation has now lasted a year, driven by considerable slowing in the nation’s most expensive markets,” said Dr. Ralph McLaughlin, Deputy Chief Economist and Executive of Research and Insights at CoreLogic. “While the slowdown is most pronounced in these areas, all of the 20-city markets are slowing, suggesting the cooldown has broken from its confines in the West. However, with the 10-year treasury falling, we can expect mortgage rates to continue to decline this spring. This should help to take the cold edge off what has otherwise been a market slow to thaw from the winter months.”
