Low-rate environment boosts new construction and home sales
Mortgage rates have plunged to their lowest level in three months, resulting in a stronger housing market, according to Freddie Mac.
Freddie's Primary Mortgage Market Survey showed that the 30-year fixed-rate mortgage (FRM) fell to 3.60% from last week's 3.65% and from 4.45% a year ago.
“Rates fell to the lowest level in three months and are about a quarter-point above all-time lows,” said Sam Khater, chief economist at Freddie Mac. “The very low-rate environment has clearly had an impact on the housing market, as both new construction and home sales have surged in response to the decline in rates, the rebound in the economy and improving financial market sentiment.”
The 15-year fixed-rate mortgage went down from an average of 3.09% to 3.04% this week. Last year, the 15-year FRM averaged 3.88%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) fell from last week when it averaged 3.39% to 3.28% this week. Last year, the five-year ARM averaged 3.90%.