As the spring housing market gets started, home buyers are taking advantage of what industry insiders believe to be the last days of low mortgage rates.
The 30-year fixed-rate mortgage averaged 3.69% this week, down from 3.78% last week. It was 4.4% a year ago this time, according to the Primary Mortgage Market Survey.
“Low mortgage rates are a welcome sign for those in the market to buy a home this spring season and will help to support home buyer affordability,” said Len Kiefer, deputy chief economist at Freddie Mac.
Rates first moved below the 4% mark the week of Nov. 10, 2011, according to Freddie Mac, thanks to intervention by the Federal Reserve. Since then, rates have fluttered up and down marginally, but home buyers have grown accustomed to these artificially low rates. However, the Fed has indicated it will not long continue to hold down interest rates. Indeed, experts are expecting a rate increase this summer.
Home buyers pushed existing-home sales slightly higher in February to a seasonally adjusted annual rate of 4.88 million units, slightly below economist expectations but still higher than last year. Meanwhile, new construction has finally entered the equation, outperforming industry expectations with a 7.8% increase in February new-home sales.
The 15-year FRM also trended down to 2.97% this week, on average, vs. 3.06% last week. It was 3.42% last year this time. Likewise, the 5-year Treasury-indexed hybrid adjustable-rate mortgage dipped to 2.92% this week from 2.97% last week. It averaged 3.1% a year ago this time.
Only the 1-year Treasury-indexed ARM was unchanged at 2.46%. However, it is higher than where it stood last year this time when it averaged 2.44%.