Are you in the market for a 15-year fixed-rate home loan? If so, you could lock down one of the lowest mortgage rates in history. (In this context, ‘history’ dates back to 1971, when Freddie Mac first began tracking interest rates in the U.S.)
The benchmark 30-year mortgage rate is also more attractive than it was last week. Both have been declining in recent weeks.
Here are the latest numbers from the Freddie Mac survey:
- The 30-year mortgage had an average rate of 3.40% last week. It started the year around 3.3% and rose gradually in the weeks that followed. The high for the first quarter came during the week of March 14, when the 30-year mortgage rate average 3.63%. It has fallen steadily since then. The next survey will be published on Thursday, May 2.
- The 15-year mortgage made headlines last week when it hit an average rate of 2.61%. That was the lowest average in more than 40 years of record keeping. That puts it 20 basis points lower than the first-quarter peak (2.81%), which occurred during the last week of January 2013. Are more record lows in store? We shall see.
Mortgage rates are expected to change little between now and summer, which is the peak home-buying ‘season’ in most parts of the U.S. Many buyers with school-aged children will rush to find a house during the summer months, ideally locking down a low mortgage rate in the process. This should help drive demand in many housing markets. But limited inventory could put a damper on sales activity.
Fixed-rate averages typically generate most of the headlines, particularly the benchmark 30-year mortgage rate. But significant events have taken place on the adjustable side, as well. The 5/1 ARM loan hit a record low last week, falling to 2.58% in Freddie Mac’s survey. That’s 13 basis points (0.13%) lower than the start of the year. These ‘hybrid’ loans start off with a fixed interest rate for the first five years. After that initial period, the rate will begin to adjust annually.
Zillow has reported an even lower average for the 30-year mortgage rate. According to their data, the benchmark 30-year loan averaged 3.28% today. This is based on lending data compiled from their own proprietary ‘Mortgage Marketplace.’