FHFA: Mortgage rates drop for fifth straight month
The average interest rate on mortgages sold to the government-sponsored enterprises in August averaged 4.56%, a drop of 1 basis point from the previous month, according to the Federal Housing Finance Agency.
It's the fifth straight month of declines since the rate to reached 4.84% in March. On Oct. 3, the Federal Reserve will begin purchasing up to $400 billion in longer-term Treasurys and new agency mortgage-backed securities as part of an effort to keep borrowing costs low.
According to Frank Nothaft, chief economist at Freddie Mac, the Fed's previous policies have already pushed interest rates to the lowest level since the early 1950s.
Any additional drop would accelerate already declining rates, according to FHFA data.
In August, the 30-year fixed-rate mortgage averaged 4.63%, down 6 bps from the prior month. On all fixed- and adjustable-rate mortgages sold to the GSEs, the average rate was 4.52%, down 3 bps from July.
Roughly 30% of the purchase mortgages were "no-point" loans, the same share as the prior three months. The average term on these loans also declined more than six months to 27.6 years in August.
The average loan-to-value ratio was 77.2%, up more than one percentage point, and the average loan amount increased slightly to $214,300 in August.
Write to Jon Prior.
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