Last week, the average 30-year fixed-rate mortgage declined by 22 basis points from 4.28 percent to 4.06 percent, resulting in the biggest single-week decline in rates since 2008, according to Freddie Mac’s latest Primary Mortgage Survey released on Thursday, March 28.
Freddie Mac chief economist Sam Khater said the drop is due to the Federal Reserve’s economic outlook, which predicted slowing economic growth.
“The Federal Reserve’s concern about the prospects for slowing economic growth caused investor jitters to drive down mortgage rates by the largest amount in over ten years,” he explained in a prepared statement.
This is good news for buyers as the dramatic drop in rates is expected to drive up home sales during the spring home buying season.
“Despite negative outlooks by some, the economy continues to churn out jobs, which is great for housing demand,” said Khater. “We have recently seen home sales start to recover and with this week’s rate drop we expect a continued rise in purchase demand.”
Bankrate economist Deborah Kearns estimates the lower mortgage rates will save buyers approximately $15.85 each month for every $100,000 they borrow in comparison to last week’s rates.
“At the current 30-year fixed rate, you’ll pay $487.27 each month for every $100,000 you borrow, down from $503.13 last week,” she explained.
* Original article by MARIAN MCPHERSON Staff Writer, Inman News