Mortgage rates drifted back down after last week’s slight rise, starting the spring homebuying season off with low rates, the most recent Freddie Mac Primary Mortgage Market survey found.
“The average 30-year fixed mortgage rate fell to 3.78% this week following mixed housing data. Housing starts dropped 17% to a seasonally adjusted pace of 897,000 units, below market expectations. However, housing permits increased 3% in February. As we head into spring, home builders remain positive about home sales in the near future although the NAHB Housing Market Index dropped another 2 points to 53 in March,” said Len Kiefer, deputy chief economist with Freddie Mac.
The 30-year, fixed-rate mortgage averaged 3.78% for the week ended March 19, down from last week’s average of 3.86%. This is also down from 4.32% a year ago.
The 15-year, FRM slightly dipped from 3.10% a week ago to 3.06% this week. In 2014, it averaged 3.32%.
Additionally, the 5-year Treasury-indexed hybrid adjustable-rate mortgage fell to 2.97%, compared to 3.01% a week ago and 3.02% a year ago.
The 1-year Treasury-indexed ARM remained unchanged from last week, staying at 2.46%. A year ago, the ARM averaged 2.49%.
Bankrate posted similar results, with its 30-year, FRM dropping to 3.91%, down from 3.97% a week ago.
The 15-year, FRM fell to 3.15%, down from 3.18%, while the 5/1 ARM dipped to 3.20%, down from 3.23% last week.
“Mortgage rates pulled back following soft economic data on manufacturing, home construction, and consumer spending. Even though the Federal Reserve continues to lay the groundwork for the eventuality of interest rate hikes, any evidence of economic softness only pushes the timetable further out,” Economists with Bankrate said about rates.
And according to Fannie Mae’s first-quarter 2015 Mortgage Lender Sentiment Survey, mortgage lenders are optimistic about the next three months.
For GSE-eligible purchase loans, 71% of lenders surveyed say they expect purchase mortgage demand to go up over the next three months, compared with 59% reported during the same quarter last year. Additionally, 41% of lenders reported increased profit margin expectations, compared with 21% during the same quarter last year.