Mortgage rates declined for their third straight week, according to the Freddie Mac [1] Primary Mortgage Market Survey [2], released on Thursday. 30-year fixed rate mortgages (FRM), 15-year FRM, and 5/1-year adjustable rate mortgages all saw drops week-over-week, despite year-over-year increases.
The 30-year FRM averaged 4.51 percent, down from the previous week’s 4.53 percent, while the 15-year FRM saw a similar decline, down from 4.01 percent to 3.98 percent. The 5/1-year ARM averaged 3.82 percent down from 3.87 percent. A year ago, the 30-year FRM averaged 3.86 percent, the 15-year FRM was at 3.16 percent and the 5/1-year ARM averaged 3.17 percent.
“Backed by very strong consumer spending, the economy is red-hot this month, which is in turn rippling through the financial markets and driving equities higher,” said Freddie Mac Chief Economist Sam Khater. “Unfortunately, the same cannot be said about the housing market, where it appears sales activity crested in late 2017. Existing-home sales have now stepped back annually for the fifth straight month, and purchase mortgage applications this week were barely above year-ago levels.”
Brian Surgener, SVP Strategy & Analytics at BBMC Mortgage [3] notes that despite decreasing rates, Americans have not been buying as much, as anticipated saying “It’s pretty much the same story it has been.”
“Though more people are employed today than they were last year we are not seeing them move up in home size or out of their rentals and into a new home,” said Surgener. “Instead they are spending money on gadgets or updating their current homes. The summer is nearly over and kids are going back to school. As we roll into the end of the year real estate transactions start to slow down. Will we be able to see the wage growth we need in Q4 or will rates grind higher and make this a tough end to 2018 for the mortgage industry?”
Find more data including the full survey results on Freddie Mac’s website [4].