Average mortgage rates inch upward
Mortgage rates have edged up this week to an average 3.26% for a 30-year fixed-rate home loan, from last week's 3.23%, mortgage giant Freddie Mac reported on Thursday.
The rate last week was the lowest ever reported in the weekly Freddie Mac survey, which started tracking mortgage rates in 1971.
The survey rates come with an average 0.7 point. Last year at this time, the typical rate on a 30-year fixed mortgage was close to one full percentage point higher, at 4.10%.
“Mortgage rates stayed at or near record lows for the fifth straight week, and homeowners are taking advantage with refinance activity remaining high,” says Sam Khater, Freddie Mac’s chief economist.
The benchmark mortgage rate hasn't gone any higher than 3.33%, on average, since the beginning of April, and Freddie Mac predicts rates will stay low throughout the year. The firm is forecasting that 30-year mortgage rates will average 3.3% during 2020, way down from last year's 3.9%.
Homebuying makes a comeback
Khater says low rates are attracting the attention of homebuyers, too, who are coming off the sidelines after hunkering down for the pandemic.
"Although purchase demand declined 35% year-over-year in mid-April, demand has improved modestly over the last three weeks," he says.
The Mortgage Bankers Association says demand for "purchase loans," to buy homes, jumped 6% last week, led by strong growth in Arizona, Texas and California.
The market also is reawakening in the Washington, D.C., area, says Corey Burr, senior vice president with Sotheby's International Realty in Chevy Chase, Maryland.
"Serious buyers are shopping for houses right now, and, with all the service industries that are a part of a real estate transaction being deemed 'essential' — including real estate companies, lenders, home inspectors, appraisers, settlement companies, movers — successful transactions are taking place with very few COVID-19 effects," he says.
Sharply reduced mortgage rates are a big attraction.
"Today’s buyers want to lock in the historically-low, 30-year, fixed-rate mortgage now in the 3.125% to 3.5% range," Burr says.
Use the mortgage calculator below to see your low payment with one of today's low mortgage rates:
Other mortgage rates this week
Rates on other popular types of mortgage loans are mixed.
The average for a 15-year fixed-rate mortgage has fallen to 2.73%, from 2.77% last week, Freddie Mac says. Fifteen-year loans are a popular refinance loan option. Those mortgages were averaging 3.57% one year ago.
Rates on 5/1 adjustable-rate mortgages are higher. The loans known as "ARMs" have fixed rates for five years and then can adjust up or down every year.
ARMs are currently being offered at an initial rate of 3.17%, up from 3.14% last week.
At this time last year, the starter rates on those mortgages were at an average 3.63%.
Take a look at today's lowest mortgage rates available where you are: