Mortgage rates took the biggest drop in a decade, with the average rate for a 30-year fixed-rate mortgage falling 22 basis points to 4.06%, according to Freddie Mac’s Primary Mortgage Market Survey.
That’s significantly lower compared with the same week one year ago, when the 30-year averaged 4.40%.
“The Federal Reserve’s concern about the prospects for slowing economic growth caused investor jitters to drive down mortgage rates by the largest amount in over ten years,” says Sam Khater, chief economist for Freddie Mac, in a statement. “Despite negative outlooks by some, the economy continues to churn out jobs, which is great for housing demand. We have recently seen home sales start to recover and with this week’s rate drop we expect a continued rise in purchase demand.”
The average rate for a 15-year fixed-rate mortgage also fell this week to 3.57%, down from 3.71%. A year ago at this time, the average rate for a 15-year was 3.90%.
For the week ended March 28, the average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.75%, down from 3.84%. A year ago at this time, the five-year ARM averaged 3.66%.