Mortgage Rates Drop But Low Inventory Remains a Concern

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After increasing for the first time in weeks the previous week, fixed mortgage rates edged back down, with the average rate for a 30-year falling 10 basis points to an average of 4.31%, Freddie Mac’s Primary Mortgage Market Survey shows.

A year ago at this time, the average rate for a 30-year was 4.44%.

The average rate for a 15-year fixed rate mortgage was 3.76%, down from 3.83% the previous week. A year ago at this time, the average rate for a 15-year was 3.90%.

The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.84%, down from 3.87%. A year ago at this time, the average rate for a five-year ARM was 3.67%.

“Mortgage rates declined decisively this week amid various market reports, a strong bond auction and further uncertainty around the Brexit deal, which all contributed to driving bond yields lower,” says Sam Khater, chief economist for Freddie Mac, in a statement. “At 4.31 percent, the average 30-year fixed mortgage rate is at its lowest since February of last year. While these low rates will certainly get the attention of prospective homebuyers, the supply of homes for sale remains stubbornly low.”

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