Mortgage rates moved lower after two straight weeks of increases, which should allow the housing market to remain strong as we shift into the typically slower fall months.
The 30-year fixed-rate mortgage averaged 3.64% during the week ending Sept. 26, falling nine basis points from the previous week, Freddie Mac reported Thursday. In 2019, mortgage rates have increased only 11 times on a weekly basis.
The 15-year fixed-rate mortgage dropped five basis points to an average of 3.16%, according to Freddie Mac. The 5/1 adjustable-rate mortgage averaged 3.38%, down 11 basis points.
Mortgage rates roughly track the direction of the 10-year Treasury note, the yield on which has fallen roughly 20% over the last week.
Over the past week, multiple reports have come out showing that the decline in mortgage rates during August gave a major boost to the nation’s housing market.
“With both the unemployment rate and mortgage rate below 4% and near historic lows, it is no surprise that the housing market regained momentum with home sales and construction at or near decade highs,” Freddie Mac chief economist Sam Khater said in the latest report. “The fall housing market is poised to continue with steady gains in prices and solid sales activity.”
Real-estate agents and home-builders are likely breathing a sigh of relief that mortgage rates didn’t continue on the upward trajectory they’ve been on for much of September. The Mortgage Bankers Association reported Wednesday that mortgage applications dropped more than 10% for the week ending Sept. 20 from the previous week as a result of rising interest rates.
While much of that decline stemmed from a slump in refinances, mortgage applications for home purchases also fell on a weekly basis, indicating how rate-sensitive today’s home buyers are.