Mortgage rates should remain near record lows for June
The Federal Reserve's actions should keep interest rates down and bring home sales back in June, according to NerdWallet.
The 30-year fixed rate mortgage averaged 3.37% in May after an average of 3.36% in April. More of the same is expected in the months ahead.
"In June, mortgage rates are likely to remain stable and low for the third month in a row as the Federal Reserve continues to get its way," Holden Lewis, NerdWallet's home and mortgage expert, said in a press release. "The Fed has succeeded so far in pushing mortgage rates down and it is expected that they will continue to intervene in the market for the next year or so."
The 30-year fixed rate mortgage ended the week of May 29 at 3.4%, nine basis points higher from the week before, according to NerdWallet's daily mortgage rates survey. The average 15-year fixed dropped 14 basis points to 2.76% and the average rate on the 5/1 ARM rose four basis points to 2.99%.
With rates bottomed out and quarantining parameters slowly lifting, mortgage volumes could continue ascending into the summer, especially on the purchase side since refinances slowed from the initial spike.
"Judging by the pace of mortgage applications in late May, home sales are making a return," Lewis said. "Last week, purchase mortgage applications were up 9% compared to the same week a year earlier. After a surge of mortgage refinance applications in February and March, refinancing activity has leveled off due to the skyrocketing unemployment rate. Compared to a year ago, refinancing applications have more than doubled."