Interest rates for home loans remained near 3-year lows this week, while coincidentally, mortgage applications experienced a jump. Are consumers finally taking advantage of historically low rates?
Freddie Mac reported in its Primary Mortgage Market Survey that the 30-year fixed-rate mortgage (FRM) averaged 3.59 percent this week with an average 0.6 point, just slightly up from last week's rate of 3.58 percent. A year ago at this time, the 30-year FRM averaged 3.65 percent.
Sean Becketti, Chief Economist at Freddie Mac said, "Volatility in financial markets subsided over the past week, allowing Treasury yields to stabilize. As a result, the 30-year mortgage rate was mostly flat, up only 1 basis point to 3.59 percent. The release of March's existing-home sales report, which shows monthly growth at 5.1 percent, suggests homebuyers are taking advantage of low mortgage rates as the spring homebuying season gets underway."
The 15-year FRM averaged 2.85 percent this week with an average 0.5 point, down from last week when it averaged 2.86 percent, Freddie Mac reported. The 15-year FRM averaged 2.92 percent a year ago at this time. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.81 percent this week with an average 0.5 point, down from last week when it averaged 2.84 percent. It averaged 2.84 percent one year ago.
Mortgage applications also experienced a jump this week, which means that consumers are taking advantage of low rates.
The Mortgage Bankers Association (MBA) reported this week that mortgage applications increased 1.3 percent from one week earlier. The index increased 2 percent compared with the previous week on an unadjusted basis. Meanwhile, the refinance index rose 3 percent from the previous week. The seasonally adjusted purchase index fell 1 percent from one week earlier, and the unadjusted purchase index increased 1 percent and was 17 percent higher than the same week one year ago.
Homebuyers overcame one of the housing market's biggest obstacles—an imbalance in supply and demand— in March with a rebound in home sales.
The National Association of Realtors (NAR) reported that existing-home salesrose 5.1 percent to a seasonally adjusted annual rate of 5.33 million in March from a downwardly revised 5.07 million in February and 1.5 percent year-over-year.
"Closings came back in force last month as a greater number of buyers – mostly in the Northeast and Midwest–overcame depressed inventory levels and steady price growth to close on a home," said Lawrence Yun, NAR Chief Economist. "Buyer demand remains sturdy in most areas this spring and the mid-priced market is doing quite well. However, sales are softer both at the very low and very high ends of the market because of supply limitations and affordability pressures."