Mortgage rates continue to drop, sitting near three-year lows
Mortgage rates continued to drop this week, hitting their lowest levels since November 2016, according to Freddie Mac.
|30-Year FRM||15-Year FRM||5/1-Year ARM|
|Fees & Points||0.5||0.5||0.3|
The 30-year fixed-rate mortgage averaged 3.55% for the week ending Aug 22, down from last week when it averaged 3.6%. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.51%.
"The drop in mortgage rates continues to stimulate the real estate market and the economy. Home purchase demand is up 5% from a year ago and has noticeably strengthened since the early summer months, while refinances surged to their highest share in three and a half years. Households that refinanced in the second quarter of 2019 will save an average of $1,700 a year, which is equivalent to about $140 each month," Sam Khater, Freddie Mac’s chief economist, said in a press release.
"The benefit of lower mortgage rates is not only shoring up home sales, but also providing support to homeowner balance sheets via higher monthly cash flow and steadily rising home equity."
The 15-year fixed-rate mortgage averaged 3.03%, down from last week when it averaged 3.07%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.98%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.32% with an average 0.3 point, down from last week when it averaged 3.35%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.82%.
"Mortgage rates barely budged this week, straying from their typical pattern of moving with bond yields. A shortage of blockbuster trade-related headlines and economic data releases kept Treasury yields within a fairly narrow range over the last seven days, mostly moving on data emerging from Europe. Mortgage rates stayed even tighter, holding near their lowest levels in three years," said Zillow economist Matthew Speakman when that company released its own rate tracker.
"The typically steadfast relationship between the two has weakened in recent weeks, as low rates and increased refinancing activity have sapped investor demand for mortgages. As a result, rates haven't dropped as far as the recent fall in Treasury yields would normally indicate. Market volatility is contributing to this changing relationship — when markets start to stabilize, the link between yields and mortgage rates will return."