Mortgage rates remained at nearly record lows this week, with the average 30-year, fixed-rate mortgage clocking in at 2.81 percent. The low rate environment is providing support to the entire economy, which, in turn, is propelling growth, Freddie Mac Chief Economist, Sam Khater said Thursday.
“Strong purchase demand is helping to lift the construction, manufacturing and transportation industries that build new homes and it is also leading to more consumer spending for owners, who are selling or improving their homes,” Khater said in a statement. “On the refinance front, many consumers are smartly taking advantage of the ability to lower their monthly payment, which means they can spend, save or pay down debt more so than they have in the past.”
The rate for a 30-year, fixed-rate mortgage was 3.78 percent a year ago at this time, according to Freddie Mac’s data. Last week, it reached a new record low of 2.80 percent.
The 15-year fixed-rate mortgage averaged 2.32 percent, down from 3.19 percent this time last year. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.11 percent, down 3.36 percent this time last year.
Today’s buyer of a median listing-price home is paying roughly $20 less per month than last year’s buyer, despite the median home costing $35,000 more, according to Danielle Hale, the chief economist at realtor.com. The demand boost provided by these low rates is expected to subside, however, as sub-3 percent mortgage rates continue to be the norm.
“With more home sellers entering the market, we expect home prices to grow more slowly,” Hale said. “A steady number of buyers powered by low rates and additional supply should mean rising home sales and less swiftly rising prices ahead.”