The average for the 30-year fixed-rate mortgage has fallen for seven weeks in a row. This week, it posted its largest drop since mid-September.
Falling mortgage rates have captured the attention of home buyers, as mortgage applications for a home purchase—a gauge of future homebuying activity—jumped 9% this week, the Mortgage Bankers Association reports. This could indicate the market is thawing after a frigid winter helped to depress home sales.
“This is a period where we typically see purchase activity ramp up—and purchase applications were [up] over the week and continued to run ahead of last year’s pace,” more green shoots as we head into the spring homebuying season,” MBA Deputy Chief Economist Joel Kan said in a statement.
The 30-year fixed-rate mortgage, now in its seventh consecutive week of declines, posted its largest weekly drop this week since mid-September, averaging 6.63%, Freddie Mac reports.
“Home buyers are in a favorable position as they encounter more inventory and improved rates ahead of a spring rush,” says Jessica Lautz, deputy chief economist at the National Association of REALTORS®.
The recent decline in rates could increase prospective home buyers’ purchasing power and provide a strong incentive to enter the market, adds Sam Khater, Freddie Mac’s chief economist. “Additionally, this decline in rates is already providing some existing homeowners the opportunity to refinance.”
MBA reported that the number of mortgage applications for home refinances surged 37% for the week and are 83% higher than the same week a year ago.
At this week’s 30-year average rate of 6.63%, home buyers would have a monthly mortgage payment of $2,050 for a home priced at $400,000, assuming a 20% down payment, Lautz says. With a 10% down payment, the typical monthly mortgage payment would be $2,306.
Freddie Mac reports the following national averages with mortgage rates for the week ending March 6:
15-year fixed-rate mortgages: averaged 5.79%, falling from last week’s 5.94% average. Last year at this time, 15-year rates averaged 6.22%.
30-year fixed-rate mortgages: averaged 6.63%, down from last week’s 6.76% average. A year ago, 30-year rates averaged 6.88%.
Source: nar.realtor
