Rates fell to their lowest level since mid-April
Mortgage rates declined for the third consecutive week during the period ending August 23, dropping to their lowest level since mid-April, according to the Primary Mortgage Market Survey released by Freddie Mac.
Rates for the 30-year fixed-rate mortgage averaged 4.51%, with an average 0.5 point, falling from the 4.53% average in the previous period. The latest average marks an increase from the 3.86% average in the same period in 2017.
The 15-year fixed-rate mortgage averaged 3.98%, with an average 0.5 point, down from 4.01%. A year ago at this time, the mortgage averaged 3.16%.
Average rates for the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) fell to 3.82%, with an average 0.3 point, from 3.87%. The 5-year ARM averaged 3.17% in the year-ago period.
“Backed by very strong consumer spending, the economy is red-hot this month, which is, in turn, rippling through the financial markets and driving equities higher,” Freddie Mac Chief Economist Sam Khater said. “Unfortunately, the same cannot be said about the housing market, where it appears sales activity crested in late 2017. Existing-home sales have now stepped back annually for the fifth straight month, and purchase mortgage applications this week were barely above year-ago levels.”
Khater said the housing market has cooled given affordability constraints, especially in expensive coastal markets. He said new and existing affordable inventory need to increase so metro areas can break out of the slump.
