Little movement on fixed-rate mortgages
Posted on Thursday, October 29, 2015 at 1:30:43 PM
The 30-year fixed-rate mortgage (FRM) fell slightly to 3.76 percent this week. Freddie Mac announced the results of their Primary Mortgage Market Survey in a press release, noting that this week's average is down from an average 3.79 percent last week. It is a significant drop from the 3.98 percent recorded at this time one year ago.
The agency attributed the small drop to market expectations that the Federal Reserve would not increase the interest rate, though that possibility still exists for December. Sean Becketti, Freddie Mac's chief economist, stated that "Recent housing reports have done little to add or detract from the possibility of a December rate increase. Existing-home sales were strong, contrasting with disappointing new-home sales."
The Associated Press reported that the slowdown in new home purchases was almost inevitable, given the 17.6 percent jump in sales early in the year and recent global pressure on the market. The slowdown has not affected existing-home sales, which show no sign of stopping. A silver lining of the drop in new home sales means more homes are on the market. Data from the Commerce Department showed that 5.8 months of homes were available for those with the right residential financing plan.