Mortgage rates hover near record lows as home construction picks up
Homebuyers heading into the marketplace are still looking at historically low mortgage rates, Freddie Mac said in its Primary Mortgage Market Survey.
The 30-year, fixed-rate mortgage for the week ending Oct. 18 hit 3.37%, which is down from 3.39% a week earlier and from 4.11% last year.
The 15-year FRM reached a new all-time low of 2.66%, down from 2.7% a week ago and well under the 3.38% reported last year.
Homebuyers and refinancing borrowers with 5-year Treasury-indexed ARMs and 1-year Treasury ARMs, saw rates rise to 2.75% and 2.6%, respectively.
"Mortgage rates remained more or less unchanged this week as home construction builds up steam," said Frank Nothaft, vice president and chief economist of Freddie Mac.
"Construction on single-family homes jumped to an annualized rate of 11% in August, the strongest pace since August 2008. Over the first nine months of the year, single-family starts were 23% higher than the same period last year. Moreover, homebuilder confidence rose for the sixth consecutive."
The low rates come at a time when homebuilders are seeing more demand for their services. Housing starts increased 15% since August to an annual rate of 872,000 homes.
The Federal Reserve has remained committed to a low interest-rate environment and targeted mortgage rates with its recent decision to acquire mortgage-backed securities at the pace of $40 billion a month.