Freddie Mac economist expects 30-year mortgage rate to hover around 3%
Mortgage rates continued their recent decline as the 10-year Treasury yield fell to its lowest point since February.
The 30-year fixed-rate mortgage averaged 2.90%, down from a week ago when it averaged 2.98%, according to Freddie Mac’s survey released on Thursday. Last year, the benchmark home loan rate was 3.03%.
“Mortgage rates decreased this week following the dip in US Treasury yields. While mortgage rates tend to follow Treasury yields closely, other factors can be impactful such as the labor markets, which are continuing to improve per last week’s jobs report,” said Freddie Mac chief economist Sam Khater.
Read more: June jobs report: US labor market is on track to full recovery
The 15-year fixed-rate mortgage also dropped this week, down six basis points to 2.20%. A year ago at this time, the 15-year loan averaged 2.52%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage saw a two-basis point dip to 2.52%. A year ago at this time, the five-year ARM was 3.02%.
“We expect economic growth to gradually drive interest rates higher, but homebuyers and refinance borrowers still have an opportunity to take advantage of 30-year rates that are expected to continue to hover around 3%,” Khater said.
