The 30 year mortgage rate reaches an all-time low
The 30-year fixed-rate mortgage (FRM) has hit rock bottom again as the US inflation rate – weakened by the coronavirus pandemic – fuels homebuying demand.
The 30-year mortgage rate has reached an all-time low of 3.13%, according to Freddie Mac's Primary Mortgage Market Survey. Freddie Mac Chief Economist Sam Khater said that the decline was primarily due to "declining inflationary pressures." The US inflation rate fell 0.1% in May – slower than the 0.8% downturn in March and less than what analysts anticipated – the Department of Labor reported last week.
"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 home buyers in the buying mood," Khater said. "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."
The 15-year fixed-rate mortgage was also lower than last week's average, down from 2.62% to 2.58%. In comparison, the 15-year mortgage rate averaged 3.25% at this time a year ago.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) inched down from 3.10% a week ago to a 3.09% average. In 2019, the 5-year ARM was 3.48%.
