Mortgage rates drop below 4 percent

  • Rates are likely at the lowest level they'll be, as a spike is expected by year's end.
  • The average loan value in August was $303,300.
  • Mortgage rates have remained range-bound between 3.8 percent and 4.1 percent since May.

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With the Federal Reserve planning to hike rates later this year, buyers should enjoy the low rates while they last.

As of late August, the average mortgage rate nationally for the purchase of an existing home was 3.99 percent.

According to the Federal Housing Financing Agency, this percentage is down three basis points from July.

fhfa-mortgage-values

The effective interest rate on all mortgage loans dropped in similar fashion — declining two basis points to 4.15 percent in August. The effective interest rate accounts for the addition of initial fees and charges over the life of the mortgage.

The average value for all loans in August was $303,300, down $1,300 from $304,600 in July.

Additionally, the average interest rate on conventional 30-year, fixed-rate mortgages of $417,000 or less was 4.20 percent, unchanged from July.

“These low mortgage rates have supported strong home sales, and 2015 is on pace to have the highest home sales total since 2007,” said Sean Becketti, chief economist for Freddie Mac, in a recent release.

“2015 is on pace to have the highest home sales total since 2007.” – Sean Becketti, chief economist for Freddie Mac

According to Freddie Mac, mortgage rates have remained below 4 percent for nine consecutive weeks — as of late September — and have remained range-bound between 3.8 percent and 4.1 percent since May.

The agency’s late-September data also showed that 15-year fixed rate mortgages averaged 3.08 percent with an average 0.6 point.

The 5-year treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.91 percent, while the 1-year treasury-indexed ARM averaged 2.53 percent.

Email Erik Pisor.