Despite global economic turmoil and extreme market volatility, fixed mortgage rates moved even lower during the week ended Jan. 21, according to Freddie Mac’s Primary Mortgage Market Survey.
It was the third consecutive week that mortgage rates moved downward. The average rate for a 30-year fixed-rate mortgage (FRM) was 3.81%, down from 3.92% the previous week. A year ago at this time, the 30-year FRM averaged 3.63%.
The average rate for a 15-year FRM was 3.10%, down from 3.19% the previous week. A year ago at this time, the 15-year FRM averaged 2.93%.
The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 2.91%, down from 3.01%. A year ago, the five-year ARM averaged 2.83%.
“The Freddie Mac mortgage rate survey had difficulty keeping up with market events this week,” says Sean Becketti, chief economist for Freddie Mac, in a stat\ement. “The 30-year mortgage rate dropped 11 basis points to 3.81 percent, the lowest rate in three months. This drop reflected weak inflation – 0.7 percent CPI inflation for all of 2015 – and nonstop financial market turbulence that is driving investors to the safe haven of Treasuries.
“However, the survey was largely complete prior to Wednesday’s Treasury rally that drove the yield on the 10-year Treasury below two percent, down 29 basis points since the end of 2015,” Becketti adds. “The average time to close a mortgage loan continued to hold at around 49 days in December – unchanged compared with November but up from 42 days in December 2014, according to Ellie Mae’s Origination Insight report.”
It appears the increase in the number of days to close in November and December was due, at least in part, to the Consumer Financial Protection Bureau’s new TILA RESPA Integrated Disclosure (TRID) rules – also known as the “Know Before You Owe” rules – which went into effect on Oct. 3.