Mortgage rates continue to drop
Most consumers and analysts expected mortgage rates to rise sharply after the first of the year. Instead, those rates have continued to decline.
At this writing, and for the sixth consecutive week, mortgage rates were on a downward spiral as the 30-year fixedrate mortgage hovers near its 2015-low of 3.59 percent, Freddie Mac reports.
“The 30-year mortgage rate dropped another 7 basis points this week to 3.65 percent,” says Sean Becketti, Freddie Mac’s chief economist. “This week’s drop leaves the mortgage rate just 6 basis points above last year’s low of 3.59 percent. In a falling rate environment, mortgage rates often adjust more slowly than capital market rates, and the early-2016 flight-to-quality has run true to form.”
The quote was included in a special report on the subject by the National Association of Realtors.
“The 30-year mortgage rate has dropped 36 basis points since the start of the year, while the yield on the 10-year Treasury has dropped 59 basis points over the same period. If Treasury yields were to hold at current levels, mortgage rates might well sink a little fur- ther before stabilizing.”
The NAR report continues:
“Freddie Mac reports the following national averages. The 30-year fixed-rate mortgages: averaged 3.65 percent, with an average 0.5 point, dropping from last week’s 3.72 percent average. Last year at this time, 30-year rates averaged 3.69 percent.
“The 15-year fixedrate mortgages: averaged 2.95 percent, with an average 0.5 point, falling from 3.01 percent last week. A year ago, 15-year rates averaged 2.99 percent. The 5-year hybrid adjustable-rate mortgages: averaged 2.83 percent, with an average 0.4 point, dropping from last week’s 2.85 percent average. A year ago, 5-year ARMs averaged 2.97 percent.”