Freddie Mac Report: Mortgage Rates Continue to Drop

Today, the Freddie Mac Primary Mortgage Market Survey was released, showing both fixed and adjustable-rate mortgages at their lowest of the year, after poor job growth in May.

The 30-year fixed-rate mortgage averaged 4.49 percent, compared to 4.72 percent this time last year, down from last week’s average at 4.55 percent.

The 15-year fixed-rate mortgage averaged 3.68 this week, compared to 4.17 percent last year, down from last week’s average at 3.74 percent.

These low averages mark eight straight weeks of declines.

In yesterday’s Beige Book report, the Federal Reserve found weak home sales and prices in the majority of Federal Districts and referred to the housing market as “fragile.”

The HSH Two-Month Forecast for mortgage rates, however, predicts a rise in mortgage rates this summer. The forecast predicts mortgage rates will drop between 4.50 and 4.90 percent for 30-year fixed-rate mortgages, and between 3.30 and 3.75 percent for 5- and 1-year adjustable-rate mortgages.

The forecast is based on assumptions of future economic growth and inflation, employment rates, supply of Treasuries, and any effects of natural disasters or oil prices.  

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