Mortgage rates in the U.S have always been a point of concern for prospective buyers interested in the market scenario. Fortunately, this week witnessed the 30-year-old mortgage rate drop to a whopping average of 4.57 percent. Mortgage rate has been declining steadily over the past few weeks, settling into a number of 4 instead of 5.
Just the prior week, the average percentage was 4.57. Last week actually saw a rise in the mortgage rate whereas this week was the third decline in the past four weeks. Freddie Mac calculates its average mortgage rate by surveying the lenders in the country from Monday to Friday. The average, however, fails to calculate the extra points which borrowers often pay to get the lowest possible rate.
Sam Khater, Freddie Mac’s chief economist and the primary information source behind weekly Primary Mortgage Market Survey says that this unexpected decrease in the rate certainly made people who were looking to buying real estate breathe deeper. The sudden drop creates the illusion of rates being cheap when actually – if compared to a year ago, the mortgage rate is still 67 points higher than last year during the same period. The 30-year-old mortgage rate was actually 3.88 percent last year in June, making deals back then far more favorable.
Readers might be interested to know that the 15-year-old mortgage rate averaged to 4.04 percent this week while the average remains 0.5 points. This remains stable since last week. The difference is clear when compared to the same period of last year when the 15-year FRM averaged to 3.17 percent.
Adjustable Rate Mortgage of the 5-year treasury hybrid index, on the other hand, showed an average of 3.87 percent this week. The average point being 0.3, it raised up from last week when the average was 3.3 percent. There isn’t an alarming change compared to last year, however, with the ARM being 3.17 percent then.
The yield on the 10-year treasury notes also saw a fall of 2.93 percent this Wednesday. It was higher by 0.4 percent last week. By Thursday morning, the rate decreased further, standing proudly at 2.90 percent.
Primary Mortgage Market Survey’s June Forecast highlights that while things might have taken a concerning turn this year, the commercial and housing market is actually on solid ground this year. There shouldn’t be any effect on housing demands. The home price increase is expected to be moderated, though it remains on the higher end for now. The lower sales activity hasn’t been brought about by rate as it is because of the creation of low supply.
The worries were mainly caused as a result of the commercial dispute between the Chinese and American markets, which then found its way into the stock market. Investors began to seek safety in bonds, and that only resulted in higher prices and lower yields.
If you’re looking to invest in the real estate housing, this might be the prime time to invest using a mortgage. The mortgage rate will continue to decline for the time being, which creates lots of avenues for potential investors.