Keep up with current mortgage rates at HousingWire’s Mortgage Rates Center. Rates are updated daily and include data from Freddie Mac and Optimal Blue.
Optimal Blue data is based on actual rate lock transactions and therefore includes borrowers across the credit spectrum. The Freddie Mac Primary Mortgage Market Survey (PMMS) provides the rates available to the best borrowers.
Freddie Mac PMMS 9/17/2020
Average mortgage rates for a 30-year fixed mortgage increased slightly to 2.87% this week, the second-lowest on record, while the less-popular 15-year rate fell to a new low of 2.35%.
The 30-year rate has broken records nine times since March because of a Federal Reserve bond-buying program that has poured about $1 trillion into the mortgage markets. The central bank resurrected a program it first used during the financial crisis a dozen years ago to create competition for bonds and cause the yields that influence mortgage rates to shrink.
The Fed issued a statement on Wednesday after the end of a two-day meeting that said it would likely keep its benchmark overnight lending rate near zero through 2023, and would continue purchasing mortgage-backed securities “at least at its current pace” for as long as necessary.
Mortgage lending volume this year is likely to break records as homeowners refinance and new buyers scramble to take advantage of some of the cheapest financing costs in history, Fannie Mae said in a forecast on Tuesday.
Originations this year are expected to reach an all-time high of $3.9 trillion, boosted by $2.4 trillion in refinancings, the highest level since 2003 and more than double the volume seen in 2019, the mortgage giant said.
“We continue to believe that a low-rate environment will support refinance demand over the forecast horizon,” Fannie Mae said in the forecast. “At the current interest rate of 2.86%, we estimate that nearly 69% of outstanding first-lien loan balances have at least a half-percentage point incentive to refinance.”
Average mortgage rates for 30-year and 15-year mortgages fell to all-time lows this week.
The 30-year average is 2.86%, breaking the prior low of 2.88% set in the first week of August, and the 15-year average is 2.37%, beating last week’s record low of 2.42%.
The rates are driving demand in the housing market, helping to counter-balance an economic slowdown that showed signs of worsening after the COVID-19 pandemic flared in some of the nation’s largest states in recent months, said Sam Khater, Freddie Mac’s chief economist.
“These low rates have ignited robust purchase demand activity,” Khater said.
While the 30-year rate rose to 2.93%, the less-popular 15-year average fixed rate set a new low at 2.42%. That’s down from 2.46% last week and breaks the record low of 2.44% set in the first week of August.
While the 30-year average rate is up, the long-term trend shows it heading down through next year, according to a Fannie Mae forecast last month.
The average 30-year rate probably will be 2.7% next year, down from 3.1% in 2020. Both would be record lows.
Average U.S. mortgage rates for a 30-year fixed loan fell to 2.91% this week, the second-lowest level on record. The average rate for a 15-year fixed home loan fell to 2.46% from 2.54%.
Existing-home sales jumped 25% in July from June. That beat the prior record gain of 21% set a month earlier, as low mortgage rates fueled demand for real estate purchases, the National Association of Realtors said in a report on Friday.
Seasonally-adjusted sales of single-family homes, townhomes, condominiums, and co-ops rose to an annualized pace of 5.86 million in July, the highest level since 2006, the report said. The median price increased 8.5% from a year ago to $304,100, breaking through the $300,000 threshold for the first time.