Better-than-expected economic reports helped to keep mortgage rates low this week. | – | Frank Nothaft, Vice President and Chief Economist |
Mortgage rates held steady in Freddie Mac’s weekly Primary Mortgage Market Survey® released on Thursday. Specifically, the 30-year fixed-rate mortgage averaged 5.22 percent with an average 0.6 point paid to obtain that rate. This was down very slightly from last week when it averaged 5.25 percent. Last year at this time, the 30-year rate averaged 6.52 percent.
Rates on typical 30-year fixed-rate mortgages, having fallen to a low of around 4.85% in the April, have hovered between 5% and 6% since then. "Better-than-expected economic reports helped to keep mortgage rates low this week," said Frank Nothaft, Freddie Mac vice president and chief economist. Generally, the opposite is true – good economic news is bad for rates. But the economy is not yet in positive territory, only less negative. "The economy slowed by an annual rate of 1 percent in the second quarter, which was more positive than market forecasts," according to Nothaft.
"Homebuyer demand improved as well, aided by high levels of housing affordability. The first half of this year contained the top six months with the most affordable housing conditions since the National Association of Realtors® began calculating its Housing Affordability Index in January 1971. As a result, pending existing home sales rose for five consecutive months ending in June, a trend not seen since July 2003. In June, a typical family would have devoted 15.7 percent of their gross income to mortgage principal and interest payments, the NAR explained."
The 15-year fixed rate mortgage rate this week averaged 4.63 percent with an average 0.6 point, down from last week when it averaged 4.69 percent. A year ago at this time, the 15-year FRM averaged 6.10 percent. See complete Freddie Mac rate chart -- click here or use the link below.
Rumors about what the U.S. government will ultimately do with mortgage giants Fannie Mae and Freddie Mac, which were taken over by the federal government last fall, has put the mortgage market on alert, but the impact on rates so far has been minimal, analysts said Thursday. The Washington Post broke a story this week indicating that the mortgages owned by the two companies may be split between “good” and “bad,” with the bad loans staying with the government and the two companies again being launched as (semi-) private entities with strong balance sheets allowing them to raise capital to issue more mortgages.
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