Mortgage Rates Hit Historic Low Of 3.13%
The 30-year fixed-rate mortgage averaged 3.13%, the lowest in the history of Freddie Mac's Primary Mortgage Market Survey. Last week, the 30-year fixed-rate mortgage averaged 3.21%.
Freddie Mac's latest report also showed a decrease in the 15-year fixed-rate mortgage to 2.58%, down from last week's average of 2.62%. The five-year Treasury-indexed hybrid adjustable-rate mortgage was slightly down to 3.09%, compared to last week's 3.10%.
"While the rebound in the economy is uneven, one segment that is exhibiting strength is the housing market. Purchase demand activity is up over 20% from a year ago, the highest since January 2009. Mortgage rates have hit another record low due to declining inflationary pressures, putting many homebuyers in the buying mood," said Sam Khater, Freddie Mac’s chief economist. "However, it will be difficult to sustain the momentum in demand as unsold inventory was at near-record lows coming into the pandemic and it has only dropped since then."
Yesterday, the Mortgage Bankers Association's Weekly Survey showed an 8% increase in mortgage applications over the previous week, with refis leading the way, increasing 10% over the previous week and 106% higher than the same week one year ago.
Roostify Co-Founder and CEO Rajesh Bhat said: "The latest data proves that the country is reopening slowly. We're seeing a spike in homebuying and refinancing spurred by all-time low interest rates. Mix that scenario with steadily improving jobs numbers and the overall economic picture is feeling more positive. What remains to be seen is whether we are at the tail end of the first wave of the pandemic, or if the recent surge in cases nationwide indicate a looming second wave, the latter of which poses a very real threat to the fragile national recovery."
In terms of job numbers, according to the U.S. Department of Labor’s weekly report on unemployment for the week ending June 13, the advance figure for seasonally adjusted initial claims was 1,508,000, a decrease of 58,000 from the previous week's revised level. The advance seasonally adjusted rate was 14.1% for the week ending June 6, unchanged from the previous week's revised rate. The previous week's rate was revised down by 0.3 from 14.4% to 14.1%.
"While the initial claims figure has trended downward for 11 consecutive weeks from its peak of 6.9 million on March 28, this number still remains at historically elevated levels and continues to illustrate the unprecedented degree of labor market disruption being registered via reduced economic activity and consumer confidence due to the ongoing COVID-19 outbreak," said Doug Duncan, chief economist at Fannie Mae.
Mark Fleming, chief economist at First American, added: “It’s likely that mortgage rates may rise again from their historically low levels, but house-buying power is positioned to remain strong by any reasonable historic standard. Record-low mortgage rates are proving to be a powerful motivator and benefit for home buyers in an otherwise challenging time.”