Mortgage Rates Hit Fresh Record-Lows…Again
US home loan insurer Freddie Mac reported Thursday that mortgage rates slipped to record lows again this week, marking the eleventh time in the last 12 weeks that the 30 year fixed mortgage rate has hit a new all-time low. Freddie’s weekly survey showed the average for the 30 year fixed loan falling to 3.56 percent, the lowest rate reported since the mortgage type debuted nearly sixty years ago and down from last week’s 3.62 percent, the previous record. The average for the 15 year fixed loan, a mortgage commonly used for refinancings, slipped to a new record low of 2.86 percent from last week’s 2.89 percent average.
Historically low interest rates have finally started to boost the housing market in recent months, with sales surging in May, homebuilder confidence rising several months in a row, and home prices rebounding in most markets around the nation. Construction spending has picked up in each of the last two months, driving up housing starts in the process. At the same time, the increase in refinancing loans brought on by the low rates has given homeowners more money in their pockets, boosting retail spending, which accounts for more than two-thirds of the overall economy.
Of course, even with the gains made in the last few months, the housing market still has a long way to go to achieve healthy levels not seen since before the recession. Tens of thousands of Americans who would likely purchase a home are being shut out by strict lending standards adopted by banks after the housing collapse. And the nation’s job market has shown signs of declining on each of the last two months, keeping many on-the-fence buyers from making the biggest financial commitment of their lives.