When the Federal Reserve made the announcement two months ago about raising its benchmark rate, there was speculation that mortgage rates would increase as a result. It turns out the increase has had an opposite effect. Rates for a 30-year fixed mortgage have dropped by over thirty basis points, these points being defined as a 0.01 percentage point. The current levels are among the lowest they’ve been in ten months.
Per recent data released by Freddie Mac, the 30-year fixed-rate average has remained steady at 3.65 percent. A year ago the rate stood a little higher at 3.76 percent. As for 15-year fixed-rates, they also held steady at 2.95 percent. Both fixed rates had an average 0.5 point. These points are the fees paid to a lender that are equal to one percent of the amount of the loan.
While fixed rates remained steady, the five-year adjustable rate mortgage did see an uptick of 2.85 percent with an average 0.4 point compared to the 2.83 percent of last week and the 2.97 percent of last year.
Mortgage applications also saw a huge surge as homeowners chose to refinance their home loans. Thanks to the boost in home values, homeowners are in a better position to take advantage of low rates. In fact, nearly 65 percent of applications involved refinancing.
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