30-Year Mortgage Interest Rates Decrease to 3.66%
For the 7th time in eight weeks, the average interest rate on 30-year fixed mortgages fell to record lows. These low interest rates have helped with the recovery of the weak housing market so far this year.
Freddie Mac stated today that the average 30-year fixed mortgage dropped to 3.66% which is down from 3.71% last week (the lowest since long term mortgages began in the 50’s).
The typical interest rate on a 15-year mortgage declined to only 2.95%–down from 2.98% last week and a smidge above the record low of 2.94% hit 2 weeks ago.
Amazingly enough, the interest rate on a 30-year mortgage has held below 4% since December—wow!
Lower rates will continue to help the economy—especially if home owners continue to refinance their higher interest rates to the current mortgage interest rates. Doing so will provide more funds which can be used to fuel the economy (lower interest rate=lower payment).
Unfortunately, home sales remain well below healthy levels. Nationally, sales of occupied homes slid in May to an adjusted rate of 4.55 million even though home sales have increased from #’s obtained at the same time last year.
Although interest rates are low, some individuals are still unable to qualify or are unable to afford the larger down payments required. Some potential home purchasers are also hesitant to purchase due to the fear of home pricing declining further.
Mortgage rates continue to drop due to the rates being “aligned” with the 10-year Treasury note. Economic uncertainty has led investors to purchase more Treasury securities which most consider a “safe investment”. As the demand for Treasury notes increases, the yield falls and so do interest rates. Amazingly enough, however, the Treasury yield will most likely fall to a lower level since the Federal Reserve will continue selling short-term Treasury’s while using the proceeds to purchase longer-term Treasury notes. The goal, of course, is to drive long-term interest rates lower in order to encourage more borrowing, and most importantly, spending.
Keep in mind that the interest rate of 3.66% does not include fees or points which may increase the interest rate. One point typically equals 1% of the loan amount and the average fee for 30-year loans was .7 points.
Interested in taking advantage of the historically low interest rates? If so, please call me directly for a no-obligation consultation. 208-869-3469 . . .