US Mortgage Rates Fall Ahead of Spring Home Buying Season

March 21, 2019 by Dan McCue
West Philadelphia's Cedar Park neighborhood, which is known for its Victorian-era architecture. (Tom Gralish/Philadelphia Inquirer/TNS)

Long-term fixed-rate mortgage rates fell to 4.28 percent this week, potentially giving consumers more incentive to commit to purchasing a home just as the spring home buying season gets under way, Freddie Mac said on Thursday.

The average rate on the 30-year, fixed-rate mortgage declined from 4.31 percent the previous week, the mortgage buyer said.

“Mortgage rates have dipped quite dramatically since the start of the year and house prices continue to moderate, which should help on the homebuyer affordability front,” said Sam Khater, Freddie Mac’s chief economist.

“The combination of improving affordability and more inventory than the last few spring selling seasons should lead to improved home sales demand,” Khater said.

The latest word on mortgage rates comes a day ahead of the National Association of Realtors report on sales of existing homes in February.

Rates climbed robustly in 2018, peaking at about 5 percent in early November, but they’ve tailed off since then.

Last year at this time, the average rate on the benchmark 30-year loan stood at 4.45 percent.

Also declining this week was the 15-year, fixed-rate loans, which dropped to 3.71 percent from 3.76 percent a week earlier.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84 percent with an average 0.3 point, unchanged from last week. A year ago at this time, the 5-year ARM averaged 3.68 percent.

On Wednesday, the Federal Reserve left its key interest rate unchanged and signaled that it expects the pace of economic growth to slow over through the end of the year.

The Fed rate, which play a key role in the setting of mortgage rates, now stands at 2.25 percent to 2.5 percent.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country from Monday through Wednesday each week.

The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates.

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