Freddie Mac released a report last Thursday that the mortgage rate declined in the past week when Federal Reserve decided not to raise the interest rates.
According to washingtonpost.com, volatility in US stock market, slow wage growth and different issues concerning global economy had been the reasons behind the Federal Reserve's decision. Though mortgage rate had declined, home owners thinking of refinancing and home buyers rejoiced with the outcome.
The 30- year- fixed average mortgage rate had dropped to 3.86 percent with an average 0.7 point compared to last week's 3.91 percent and 4.2 percent last year while the 15- year- fixed average mortgage declined to 3.08 percent with 0.6 point which is 3.11 percent last week and 3.36 percent last year.
Sean Becketti, Freddie Mac chief economist, said "Global growth concerns and lackluster inflation convinced the Fed to defer a hike in the Federal funds rate. In response, Treasury yields fell about 9 basis points over the week, with some larger day-to-day swings along the way."
In a report by housingwire.com, Becketti added several benefits of the lower mortgage rates. He said "Mortgage rates have remained below 4% for 9 consecutive weeks and have remained range-bound between 3.8 and 4.1% since May. These low mortgage rates have supported strong home sales, and 2015 is on pace to have the highest home sales total since 2007."
The fixed five- year average mortgage has 2.91% with an average of 0.5 point this week compared to last week's 2.92% and 3.08% last year. The fixed 1- year mortgage rate average is 2.53 percent with 0.2 point- average this week compared to 2.56 percent last week and 2.43 percent last year.
Mortgage Bankers Association released a report saying that the declined rates had boosted mortgage applications for the past week. The total loan application volume increased with 13.9 percent compared to loan applications last week. Also, Mike Fratantoni, MBA's chief economist, said "We saw significant rate volatility last week surrounding the [Federal Reserve] meeting, and rate declines toward the end of the week likely drove applications from both prospective home buyers and borrowers looking to refinance."