Mortgage rates dropped this week following an encouraging inflation report, Freddie Mac said Thursday as it debuted its revised survey.
The government-sponsored enterprise said its updated Primary Mortgage Market Survey (PMMS) showed the 30-year fixed-rate mortgage averaged 6.61% this week.
“Mortgage rates tumbled this week due to incoming data that suggests inflation may have peaked,” said Freddie Mac Chief Economist Sam Khater. “While the decline in mortgage rates is welcome news, there is still a long road ahead for the housing market. Inflation remains elevated, the Federal Reserve is likely to keep interest rates high, and consumers will continue to feel the impact.”
Fannie Mae's report follows one by Mortgage News Daily (MND) last week. MND, which tracks daily mortgage rates, said on Friday that rates posted their largest drop since 2009 following the release Thursday of the consumer price index report, which found that annual inflation had fallen to 7.7%, prompting some economists to suggest that inflation has peaked.
Freddie Mac officials said earlier this month that they adjusted the methodology for its weekly rate survey to “account for changes in technology and the mortgage industry, while maintaining continuity with historical rates,” in order to “ensure that the PMMS continues to provide high-quality information" on the mortgage market.
Khater added that, over the past 50 years, “Freddie Mac has closely monitored the trajectory of mortgage rates. This week we are launching enhancements to our Primary Mortgage Market Survey methodology that will increase its accuracy and reliability. This new approach will incorporate more detailed data and monitor real-time mortgage rates more closely.”
Instead of surveying lenders, the weekly results are now based on thousands of applications from across the country that are submitted to Freddie Mac when a borrower applies for a mortgage. Additionally, the PMMS will no longer publish fees & points or adjustable rates. The newly recast PMMS was put in place this week.
According to the survey:
- 30-year fixed-rate mortgage averaged 6.61% as of Thursday, down from last week when it averaged 7.08%. A year ago at this time, the 30-year FRM averaged 3.1%.
- 15-year fixed-rate mortgage averaged 5.98%, down from last week when it averaged 6.38%. A year ago at this time, the 15-year FRM averaged 2.39%.
The PMMS is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit, Freddie Mac said.
