The average rate for a 30-year, fixed-rate mortgage continued to plummet, dropping to 2.67 percent last week, the lowest since Freddie Mac began tracking the data in 1971. A year ago at this time, it averaged 3.73 percent.
“The housing market continues to surge higher and support an otherwise stagnant economy that has lost momentum in the last couple of months,” Sam Khater, Freddie Mac’s chief economist, said in a statement.
“Mortgage rates are at record lows and pushing many prospective homebuyers off the sidelines and into the market,” Khater added. “Homebuyer sentiment is sanguine and purchase demand shows no real signs of waning at all heading into next year.”
The average rate for a 15-year fixed-rate mortgage dropped to 2.21 percent down from 3.19 percent at the same time last year. The average rate for a 5-year Treasury-indexed hybrid adjustable-rate mortgage hit 2.79 percent, down from 3.36 percent at this time last year.
The record-low rates come on the heels of the Federal Reserve’s Open Market Committee’s decision to keep interest rates steady at zero. MBA SVP and Chief Economist Mike Fratantoni.
“Monetary policy has been quite supportive for housing and mortgage markets,” Mike Fratantoni, the senior vice president and chief economist at the Mortgage Bankers Association, said in a statement. “Low rates have stimulated an epic refinance wave, and have also increased affordability for many potential homebuyers.”
“The Fed today has provided additional assurance that supportive policies will remain in place, and there is hope that an additional fiscal stimulus package will soon be passed to support households and businesses currently in distress.”