Average mortgage rates stay down in the depths
Mortgage rates have edged this week to an average 3.18% for a 30-year fixed-rate home loan, from last week's record-breaking 3.15%, Freddie Mac reported on Thursday.
The survey rates come with an average 0.7 point. One year ago, borrowers were finding 30-year fixed mortgages with typical rates of 3.82%.
Freddie Mac has been tracking rates for nearly half a century, and last week's new survey low was the third in just the last few months.
The benchmark mortgage rate has been averaging 3.33% or lower since early April, and Freddie Mac predicts rates will stay low for the duration of 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%.
But the research team at Realtor.com has predicted that average rates "may slide under 3% by the end of the year," and rates as low as 2.5% are already cropping up — but you have to be a diligent comparison shopper.
Use the mortgage calculator below to see the low payment you'd get from one of today's low mortgage rates:
Low rates motivate homebuyers
“While the economy is slowly rebounding, all signs continue to point to a solid recovery in home sales activity heading into the summer as prospective buyers jump back into the market. Low mortgage rates are a key factor in this recovery,” says Sam Khater, Freddie Mac’s chief economist.
Homebuyers eager to take advantage of today's ultra-cheap mortgage rates are shopping for homes and loans.
The Mortgage Bankers Association, or MBA, reported Wednesday that applications for homebuyer loans rose 5% last week and were up 18% from a year earlier. In mid-April, demand for those mortgages was down 35% from last year.
But some house shoppers are having trouble finding anything to buy.
"While homebuyer demand is up and has been broad-based across most geographies, supply has been slower to improve," Khater says. "In fact, the gap between supply and demand has widened even further than the large gap that existed prior to the pandemic."
Some sellers remain skittish about listing their homes in the current environment, explains George Ratiu, senior economist with Realtor.com.
"The real estate market continues to face headwinds. The number of unemployment insurance claims continued to rise and housing inventory remains highly constrained as sellers remain cautious of the current social turmoil," Ratiu says.
Other mortgage rates this week
Other popular types of mortgage loans are mixed this week, according to Freddie Mac.
The average for a 15-year fixed-rate mortgage is unchanged this week at 2.62%, the survey says. Fifteen-year loans are a popular refinance option. Those mortgages were averaging 3.28% one year ago.
Rates on 5/1 adjustable-rate mortgages are lower. Those loans are commonly known as "ARMs" and have rates that are fixed for five years and then can adjust up or down every year.
ARMs are currently being offered at an initial rate of 3.10%, down from 3.13% last week.
At this time last year, the starter rates on those mortgages were averaging 3.52%.
Take a look at today's lowest mortgage rates available where you are: