After increasing for much of 2018 due to the strong economy; mortgage rates have stabilized and have declined recently. Despite the Federal Reserve raising the benchmark earlier in June, mortgage rates have not followed. The Federal Reserve has hinted at two more increases in 2018 as they seek to normalize rates with the strong economy. Because rates are anticipated to rise later in 2018; we recommend buyers jump on the lower rates to take advantage of lower payments.
Sam Khater, Freddie Mac’s chief economist, said mortgage rates have settled down and stabilized these last two months. “The decrease in borrowing costs are a nice slice of relief for prospective buyers looking to get into the market this summer,” he said. “Some are undoubtedly feeling the affordability hit from swift price appreciation and mortgage rates that are still 67 basis points higher than this week a year ago.”
Added Khater, “As highlighted in our June Forecast, the economy and housing market overall are on solid footing this summer, which should support continued strength in housing demand. Home price growth is still high, but is expected to moderate, and while sales activity has slowed, it’s primarily because of stubbornly low supply.”
· 30-year fixed-rate mortgage (FRM) averaged 4.55% with an average 0.5 point for the week ending June 28, 2018, down from last week when it averaged 4.57%. A year ago at this time, the 30-year FRM averaged 3.88%.
· 15-year FRM this week averaged 4.04% with an average 0.5 point (unchanged from last week). A year ago at this time, the 15-year FRM averaged 3.17%.
· 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.87% this week with an average 0.3 point, up from last week when it averaged 3.83%. A year ago at this time, the 5-year ARM averaged 3.17%.