The average long-term mortgage rates in the United States fell this week. According to USA Today, decrease in the rates were almost at par with historically low levels during the beginning of the home-buying season for spring.
Freddie Mac, notable mortgage giant, confirmed that the national average for a 30-year fixed rate mortgage dropped from 3.86 percent to 3.78 percent just last week. Meanwhile, the national average for a 15-year fixed rate mortgage, which is quite famous to homeowners who tend to refinance, fell from 3.10 percent to 3.06 percent a week ago.
These drops happened a week after the biggest one-week jump in a span of six months, according to The Mortgage Reports. The article also encouraged those who have not refinanced earlier this quarter to finally make the decision to do so.
Additionally, Market Watch pointed out that the five-year Treasury-indexed hybrid adjustable rate type of mortgage slipped to 2.97 percent from last week’s 3.01 percent. However, the one-year Treasury-indexed adjustable rate mortgage did not undergo any change as it remained at 2.46 percent.
“Housing starts dropped 17 percent to a seasonally adjusted pace of 897,000 units – below market expectations,” Mac said, according to National Mortgage Professional. “However, housing permits increased percent in February. As we head into spring, home builders remain positive about home sales in the near future, although the NAHB Housing Market Index dropped another two points to 53 in March.”
According to Biz Journals, housing starts is the measure of new home constructions in the area.
It was reported that the average rate of 30-year mortgages last year was at 4.32 percent and at 3.32 percent for 15-year mortgages. Mortgage rates have all stayed at a low level, even if the Federal Reserve already ended its monthly bond purchases last October,which was purposely designed to hold down long-term rates.
Still, the Federal Reserve managed to keep short-term mortgage rates at almost 0 for more than six years. According to USA Today, the Fed is admittedly not yet prepared to start raising them. The group turned on their “wait-and-see” mode for an economic stimulus, as reported by The Mortgage Reports. Furthermore, Mortgage Daily is convinced that signs indicate that “an even further decline” will occur soon.
Mortgage rates do not just drop overnight. Even if that will be the case, the impact is still strongly felt. According to Money Sense, mortgage rates change from time to time since it is a hugely lucrative business for banks.
