Housing market gets a boost from a surprising shift
US mortgage rates are continuing to decline. Redfin's latest survey revealed that its estimate of the 30-year average fell again last week, while Freddie Mac's latest Primary Mortgage Market Survey (PMMS) revealed a decline in its own average reading to 6.63% as of August 7.
“The 30-year fixed-rate mortgage dropped to its lowest level since April,” said Sam Khater, Freddie Mac’s chief economist. “The decline in rates increases prospective homebuyers’ purchasing power and our research shows that buyers can save thousands by getting quotes from a few different lenders.”
This week’s average marks a decrease from 6.72% a week earlier and a slight rise from 6.47% at the same time last year. The 15-year FRM averaged 5.75%, down from 5.85% the previous week, and up from 5.63% a year ago.
Freddie Mac’s PMMS focuses on conventional, conforming, fully amortizing home purchase loans for borrowers who make a 20% down payment and have excellent credit. The latest data shows the 30-year FRM has ranged between 6.08% and 7.04% over the past 52 weeks, with a 52-week average of 6.68%. The 15-year FRM’s range has been between 5.15% and 6.27%, averaging 5.85% over the same period.
The recent decline in mortgage rates appears to be influencing borrower behavior. Mortgage applications in the US rose for the week ending August 1, according to the Mortgage Bankers Association. Analysts link this continued increase to easing borrowing costs, which are offering welcome relief to prospective buyers and potentially signaling a renewed pace of market activity.
The recent report follows an announcement that Freddie Mac has expanded its CHOICEHome financing program to include modern, single-section, factory-built homes. Often costing around $200,000 including land—compared to more than $500,000 for traditional site-built properties—these homes are aimed at boosting supply in underserved markets and improving affordability for first-time and lower-income buyers.
Freddie Mac, chartered by Congress in 1970, works to promote liquidity, stability and affordability in the US housing market.
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