Will Mortgage Rates FallAre mortgage rates going to fall?
Mortgages rates will fall for a second just weeks
Mortgages have fallen for two consecutive week and have reached their lows in seven consecutive week, according to Freddie Mac. Falling interest rates offer a small degree of easing to home buyers, who have recently been confronted with the two major issues of higher house rates and higher mortgage rates.
The Freddie Macs Primary Market Mortgage Survey shows that the median interest of a 30-year fixed-rate mortgage has fallen to 4.54 per cent. This is a decline of 4.56 per cent in the preceding weeks, but a significant increase over the 3.89 per cent recorded in the year before. 15-year mean rates declined even more, from 4.06 per cent to 4.01 per cent.
Five-year variable-rate mortgage interest also declined from 3.80 per cent to 3.74 per cent. "Home buyers have taken the opportunity of the recent interest moderation that last weekend resulted in a 4 per cent rise in buying requests," said Sam Khater, Freddie Mac's head of economics. Price levels are on the rise because the housing market - especially cheaper entry-level real estate - is outstripping housing market availability.
High interest rates aggravate the situation by raising the amount of money paid each month and reducing affordable prices for some potential purchasers. Liberation from the rise in interest rates - however humble they may be - is due to the fixed-income securities markets. This has relaxed the return on the 10-year Treasury issue, which has a significant impact on mortgage rates.
At its Mortgage Rate Trend Index this weekend, Bankrate found a large number of sector panellists in its poll believe that interest rates will increase next weekend or so. Just 23 per cent forecast that mortgage rates would fall further.
FreeDie Mac: Mortgages rates fall to rock bottom since mid-April | 23.08.2008
According to Freddie Mac's latest Primary Mortgage Market poll, mortgage rates fell for the third year in a row. Mr Freddie Mac Chief Economist Sam Khater said that mortgage rates have now hit their lows since mid-April. The Primary Mortgage Market poll showed that the 30-year fixed-rate mortgage was 4.51% on average in the weekly period ending 23 August 2018, up from 4.53% last weekend, but still rose significantly from 3.86% a year earlier.
"Supported by very buoyant consumption expenditure, the economies are glowing with heat this past months, which in turn is crimping through the finance mix and pushing stocks higher," Khater said. "Unfortunately, the same cannot be said about the residential property sector, where selling seems to have declined by the end of 2017." Khater noted as such that for the fifth year in a row portfolio property disposals have declined, and mortgage requests for this particular weekend are hardly above last year's level.
In particular, the latest house price index of the Federal Institute for Housing, which reveals house price data, is now rising at the lowest rate in the last four years. 15-year-old FRM was an average of 3.98 this weekend compared to 4.01% last weekend. At this point last year, the 15-year-old FRM stood at 3.16%.
A five-year Treasury-indexed floating rate mortgage, the hybride variable interest mortgage was on average 3.82% this past weekend, up from 3.87% last weekend, but still above that level last year when it was 3.17%. Realtor.com chief economist Danielle Hale said different economies are causing mortgage rates to stagnate relatively again this weekend.