Mortgage rates moved lower for the second consecutive week, sending purchase applications higher in further signs of pent-up demand amid an ongoing affordability crisis in the housing market.
Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage dropped to 6.69% — the lowest since October — from last week’s reading of 6.81%. The average rate on a 30-year loan was 7.03% a year ago.
Many would-be buyers and sellers are holding out to see if rates fall further. Currently, about 80% of mortgage holders have a rate below 5%, according to a Zillow survey from earlier this year.
“This week, mortgage rates decreased to their lowest level in over a month,” said Sam Khater, Freddie Mac’s chief economist. “Despite just a modest drop in rates, consumers clearly have responded as purchase demand has noticeably improved. The responsiveness of prospective homebuyers to even small changes in rates illustrates that affordability headwinds persist.”
The average rate on the 15-year fixed mortgage fell to 5.96% from 6.10% last week. One year ago, the rate on the 15-year fixed note averaged 6.29%.
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