Mortgage rates fell for the fourth consecutive week, according to Freddie Mac’s latest survey, with the 30-year fixed-rate mortgage averaging 3.79%, down from 3.81% a week ago, and the 15-year fixed averaging 3.07%, down from 3.10%.
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In the last four years, the rates charged by lenders have dramatically lowered. The 30-year fixed mortgage has an average of 0.21 discount and origination points.
Click video above to hear what McBride says about mortgage rates in 2016.
“If the stock market drops another 300 to 400 points some day, mortgage rates might go down another eighth of a percent”, said Ken Perlmutter, president of Perl Mortgage of Chicago. In 2012 someone with 40 per cent equity, for instance, would have been charged 4.05 per cent for a two year fix: now the same deal is less than half at just 1.99 per cent.
The survey covers over 75% of USA retail residential mortgage applications, according to MBA. The short term, popular 15 year FRM interest rates at the bank start at 3.250% with an April of 3.441% today. On Thursday morning, the yield was stable at 2%.
Adjustable rate mortgage loans accounted for 6.9% of all applications, up from 6.0% in the previous week. There is also a speculation that homes sales may plateau this year after a solid increase in 2015.
The Market Composite Index, a measure of mortgage loan application volume, increased 8.8 percent on a seasonally adjusted basis from one week earlier. This average does not include extra fees, which are known as points.
Meanwhile, anyone grabbing a low rate should use the saving to overpay their mortgage to decrease the term, advised Charlotte Nelson.
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Federal National Mortgage Association economist Mark Palim is estimating a gradual increase in 30-year mortgage rates to 4.2 percent by the end of 2016 – a modest increase that goes along with modest growth in the economy. There is no clear consensus this week, with 46 percent of the respondents predicting that mortgage rates will remain more or less unchanged in the next seven days, while 36 percent forecast further declines.
