Freddie Mac issued a “look out below” warning as the average 30-year fixed-rate mortgage (FRM) dropped 22 basis points from one week earlier, the greatest one-week drop in a decade.
The 30-year FRM averaged 4.06 percent for the week ending March 28, down from last week when it averaged 4.28 percent. The 15-year FRM this week averaged 3.57 percent, down from last week when it averaged 3.71 percent. And the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.75 percent, down from last week when it averaged 3.84 percent.
Sam Khater, Freddie Mac’s Chief Economist, said, “The Federal Reserve’s concern about the prospects for slowing economic growth caused investor jitters to drive down mortgage rates by the largest amount in over 10 years. Despite negative outlooks by some, the economy continues to churn out jobs, which is great for housing demand. We have recently seen home sales start to recover and with this week’s rate drop we expect a continued rise in purchase demand.”
Separately, the Federal Housing Finance Agency (FHFA) reported the average interest rate on all mortgage loans in February was 4.50 percent, down 15 basis points from 4.65 in January. The National Average Contract Mortgage Rate for the Purchase of Previously Occupied Homes by Combined Lenders Index was 4.46 percent for loans closed in late February, down 14 basis points from 4.60 percent in January. And the average interest rate on conventional, 30-year, fixed-rate mortgages of $484,350 or less was 4.67 percent, down 11 basis points from 4.78 in January. The average loan amount for all loans was $313,400 in February, up $5,900 from $307,500 in January, FHFA added.