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Freddie Mac: Spring ushers in lower mortgage rates

Posted on Thursday, March 19, 2015 at 10:05:23 AM

Friday, March 20 is the first day of spring, and while the weather hasn't exactly been spring-like in the Northeast, there is a silver lining: lower residential financing rates.

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 3.78 percent for the week ending March 19. That is slightly below the level reported one week ago and significantly lower than the 4.32 percent seen at the same time in 2014. The 15-year FRM also ticked down, now at 3.06 percent compared to 3.32 percent a year ago at this time.

Len Kiefer, deputy chief economist for Freddie Mac, pointed to housing data as the key reason for the decline in rates.

"Housing starts dropped 17 percent to a seasonally adjusted pace of 897,000 units, below market expectations," explained Kiefer. "However, housing permits increased 3 percent in February. As we head into spring, homebuilders remain positive about home sales in the near future although the NAHB Housing Market Index dropped another two points to 53 in March."

In addition, the Mortgage Bankers Association reported that residential financing applications also dropped on a weekly basis, now 3.9 percent lower for the seven-day period ending March 13. The refinance share of mortgage activity slipped as well, as did the adjustable-rate mortgage share.