The average interest rate for a 30-year fixed rate loan fell to 3.99% for the week ending March 29, compared to 4.08% the week prior, according to new figures compiled by Freddie Mac.
Meanwhile, the rate-indicative 10-year Treasury bond yield fell below 2.2% late Thursday morning after nearing 2.4% earlier in the month. Still, the bond yield remained above its pre-March range, which was closer to 2%.
The drop in the 30-year rate came on the heels of a slight downward rate revision Freddie made in its new monthly economic forecast. “We took it down a little bit, so it ends the year right around four-and-a-half,” Freddie Mac chief economist Frank Nothaft told this publication. Previously, Nothhaft had predicted a 4.7% yield at yearend.
Nothaft said his new forecast is “slightly more optimistic” for originators and the housing market based on recent market indicators. But he added that he generally likes to see a few sustained months of data before considering a trend established.
“I'm not saying that things are great,” he said. Market participants, such as homebuilders, “will tell you they don't feel great -- they feel horrible,” he said. “But they will tell you that they just feel less horrible than they did.”
