The anxiety leading up to what the Federal Reserve might do at its most recent meeting had caused mortgage rates to creep up recently. But after the Fed’s assurance last week that it wouldn’t raise rates until the economy was ready, the home loan market breathed a sigh of relief.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average sank to 3.69 percent with an average 0.6 point, its lowest level since mid-February. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.78 percent a week ago and 4.4 percent a year ago.
The 15-year fixed-rate average fell to 2.97 percent with an average 0.6 point. It was 3.06 percent a week ago and 3.42 percent a year ago. It was the first time the 15-year fixed rate had been below 3 percent since mid-February.
Hybrid adjustable rate mortgages were mixed. The five-year ARM average slid to 2.92 percent with an average 0.4 point. It was 2.97 percent a week ago and 3.1 percent a year ago.
The one-year ARM average held steady at 2.46 percent with an average 0.4 point. It hasn’t budged for the past three weeks.
“The average 30-year fixed mortgage rate fell to 3.69 percent this week following a decline in 10-year Treasury yields,” Len Kiefer, Freddie Mac deputy chief economist, said in a statement.
“Low mortgage rates are a welcome sign for those in the market to buy a home this spring season and will help to support homebuyer affordability. Existing home sales in February increased slightly, but less than expected, to a seasonally adjusted annual rate of 4.88 million units. Meanwhile, new home sales outperformed expectations and surged 7.8 percent to an annual pace of 539,000 units.”
Not surprisingly, as rates fell, mortgage applications jumped, according to the latest data from the Mortgage Bankers Association.
The market composite index, a measure of total loan application volume, increased 9.5 percent. The refinance index rose 12 percent, while the purchase index dropped climbed 5 percent.
The refinance share of mortgage activity accounted for 61 percent of all applications.