Mortgage rates were relatively unchanged according to Freddie Mac’s latest Primary Mortgage Market Survey, which found the average rate of a 30-year fixed rate mortgage rose marginally from 3.64% to 3.65% for the week ending on September 26.
“While mortgage rates generally held steady this week, overall mortgage demand remained very strong, rising over 50% from a year ago thanks to increases in both refinance and purchase mortgage applications,” said Sam Khater, Freddie Mac's Chief Economist. "As economic growth decelerates, it is clear that low mortgage rates will continue to support the mortgage market and we expect that to persist for the remainder of the year.”
George Ratiu, realtor.com’s Senior Economist, said investors reacted poorly to growth prospects and the drop in ISM manufacturing index at the start of Q4 2019. While those actions pushed markets on a roller coaster ride, mortgage rates remain 100 basis below 2018’s levels.
“With the fall season ahead, shoppers can expect continued low rates, and a boost to their budgets,” Ratiu said. “However, the shrinking entry and mid-level inventory remains the crucible of this year’s market, and will continue testing first-time buyers’ patience.”
The average rate of a 30-year fixed rate mortgage this time last year was 4.71%. The 15-year fixed-rate mortgage averaged 3.14% for the week ending September 26, which is a slight decline from last week 3.16%. Average rates on a 15-year fixed-rate mortgage last September was 4.15%.
Historically low mortgage rates through most of the second half of 2019 led Freddie Mac to forecast that mortgage originations will reach $2.1 trillion in 2019. Freddie Mac said the forecast is due mostly to the surge of refinancing and strong homebuyer demand.
Mortgage originations have grown from $1.6 trillion last year to 2.1 trillion in 2019. Originations, however, are expected to fall back down in 2020 to $1.8 trillion.
“Despite fears of an economic slowdown, the housing market continues to be a bright spot in the economy,” Khater said. “While mortgage rates have ticked up in recent weeks, they remain lower than they were a year ago, which will help boost sales headed into the fall."