The average of rates for 30-year fixed-rate mortgages is now at the lowest point in 50 years, the Federal Home Loan Mortgage Corporation, better known as Freddie Mac, said today.
Freddie Mac’s Primary Mortgage Market Survey for the week ended July 16 showed that the rate was 2.98%, the lowest in the survey’s history dating back to 1971 and the first time in 50 years that the average of rates fell below 3% for 30-year fixed-rate mortgages. A year ago the average rate had been 3.81%. Back in 1981, 30-year fixed-rate mortgages were at 18.63%, for those who could get one.
On Jan. 2 of this year, 30-year fixed-rate mortgages were averaging 3.72% interest with 0.7% in fees and points.
Rates for 15-year fixed-rate mortgages averaged 2.48% for the week ended July 16, compared with an average of 3.23% a year ago.
Both the 30-year and 15-year fixed-rate mortgages required fees and points that averaged 0.7%.
The average of rates for 5-year hybrid adjustable-rate mortgages indexed to U.S. Treasury rates averaged 3.06% in interest with fees and points averaging 0.3%. That was up slightly from the 3.48% average interest a year ago.
“The drop has led to increased homebuyer demand and these low rates have been capitalized into asset prices in support of the financial markets,” said Sam Khater, Freddie Mac”™s chief economist. “However, the countervailing force for the economy has been the rise in new virus cases which has caused the economic recovery to stagnate, and this economic pause puts many temporary layoffs at risk of ossifying into permanent job losses.”
Freddie Mac compiles the numbers by surveying a mix of lender types such as credit unions, commercial banks and mortgage lending companies.
It reported that mortgage refinancing activity surged at the end of the first quarter of 2020. Freddie Mac said there were nearly $400 billion in single-family mortgage refinances, about double the volume recorded for the same period in 2019. It attributed the increase in refinancing activity to the historically low mortgage rates. It said that about 65% of all mortgage applications in the first quarter of 2020 were for refinancing.
Freddie Mac said that about $26.3 billion in home equity was cashed out by borrowers, up from the $17.3 billion in equity that was taken by borrowers in the comparable period a year ago.
