The average U.S. rate for a 30-year fixed mortgage rose two basis points to 3.28% this week, not far from the 3.23% all-time low set at the end of April.
The rate increased from 3.26% in the prior week, Freddie Mac said on Thursday.
The average has stayed under 3.4% since the beginning of April after the Federal Reserve began a bond-buying program aimed at greasing the nation’s credit wheels.
“Mortgage rates have stabilized at very low levels over the last few weeks as homebuyer demand slowly improves,” said Sam Khater, Freddie Mac’s chief economist.
Khater forecasts the average rate in the current quarter for a 30-year fixed home loan will be 3.3%. In the final two quarters of 2020, he’s expecting it to fall to 3.2%.
The low rates will help to bolster real estate demand as U.S. states begin easing pandemic restrictions, he said. Mortgage applications to finance home purchases have risen for four consecutive weeks, the Mortgage Bankers Association said in a Wednesday report.
“Although purchase applications reached a new low in mid-April, today purchase demand is only down 10% from one year ago,” Khater said. “While demand is improving, inventory is low and declining with no signs of a turnaround yet.”
The number of U.S. home sales this year likely will fall 14% compared with 2019 as the nation grapples with the worst pandemic in over a century, according to a forecast from the National Association of Realtors.
Rather than having a traditional spring buying season, the April through June period when the bulk of home sales typically occur, demand will shift to later in the year when lockdowns have lifted, NAR said.
For the year, the group is forecasting 4.62 million home sales, down from 5.34 million in 2019.
Freddie Mac on Thursday also reported average rates for two other types of mortgages. The 15-year fixed rate was 2.72%, down from 2.73% last week.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.18%, up from last week’s rate of 3.17%.