As mortgage rates drop, is it time for clients to buy?
Mortgage rates have fallen to their lowest level in 10 months, which may be good news for house hunting clients as the spring home buying season approaches.
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The 30-year fixed-rate mortgage averaged 4.41% for the week ending Feb. 7, down from last week when it averaged 4.46%, according to Freddie Mac. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.32%.
"The U.S. economy remains on solid ground, inflation is contained and the threat of higher short-term rates is fading from view, which has allowed mortgage rates to drift down to their lowest level in 10 months. This is great news for consumers who will be looking for homes during the upcoming spring home buying season. Mortgage rates are essentially similar to a year ago, but today's buyers have a larger selection of homes and more consumer bargaining power than they did the last few years," Sam Khater, Freddie Mac's chief economist, said in a statement.
The 15-year fixed-rate mortgage this week averaged 3.84%, down from last week when it averaged 3.89%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.77%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.91% with an average 0.3 point, down from last week when it averaged 3.96%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.57%.
"Mortgage rates ended up flat over the past seven days, despite sharp movements that followed Wednesday's Federal Reserve announcement. Markets interpreted Wednesday’s announcement of a pause in future rate hikes as a signal that the Fed is more concerned about economic risks than they had previously let on, and rates consequently spent the better part of two days retreating to one-year lows," said Aaron Terrazas, senior economist at Zillow.
"The U.S. government shutdown meant markets went much of January without the regular cadence of economic data releases, and now that the government has reopened, markets appear to be placing a large emphasis on these releases in an effort to get a handle on an uncertain economic outlook. As a result, these releases have the potential to move the market sharply, and that's exactly what occurred this week," Terrazas said.