Freddie Mac’s latest Primary Mortgage Market Survey [1] results revealed a significant drop in mortgage rates, reaching its lowest point in three months.
The survey results for the 30-year fixed-rate mortgage (FRM) averaged 4.63 percent with an average 0.5 point for the week ending December 13, 2018—a drop from an average of 4.75 the week prior. It noted that the 30-year FRM averaged 3.93 percent the same period a year ago.
“The 30-year fixed fell to 4.63 percent this week – the lowest it has been since mid-September,” said Sam Khater, Chief Economist at Freddie Mac [2].
Sharing her insights on the Freddie Mac release, Danielle Hale, Chief economist at Realtor.com, said, “Mortgage rates slipped further this week as previous volatility in stock and bond markets was passed through to borrowers. At 4.63 percent, rates are the lowest they’ve been since mid-September, but remain 70 basis points above year-ago levels.”
In the 15-year FRM category, the average was at 4.07 percent with an average 0.5 point—recording a decline from an average of 4.21 percent the past week. Last year, the 15-year FRM averaged 3.36 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.04 percent with an average 0.3 point. This is a decline from last week’s average of 4.07. The 5-year ARM averaged at 3.36 percent in 2017.
Khater pointed out that “mortgage rates have either fallen or remained flat for five consecutive weeks and purchase applications have seen an uptick in demand on account of the lower rates. “While the housing market softened in response to higher rates through most of this year, the combination of a low unemployment and recent downdraft in rates should support home sales heading into the early winter months,” he said.
Hale indicated that lower rates may be a lucky break for home buyers still shopping, enticing those hoping to buy a home next year to start their search early. “Although we don’t see it in this week’s data, momentum has started to shift and rates are likely lining up to resume their upward climb,” she said.