According to Freddie Mac's June 2018 Primary Mortgage Market Survey, U.S. mortgage rates declined over the past week and have now retreated in four of the past five weeks.
Sam Khater, Freddie Mac's chief economist, says mortgage rates have settled down and stabilized these last two months. "The decrease in borrowing costs are a nice slice of relief for prospective buyers looking to get into the market this summer," he said. "Some are undoubtedly feeling the affordability hit from swift price appreciation and mortgage rates that are still 67 basis points higher than this week a year ago."
Added Khater, "As highlighted in our June Forecast, the economy and housing market overall are on solid footing this summer, which should support continued strength in housing demand. Home price growth is still high, but is expected to moderate, and while sales activity has slowed, it's primarily because of stubbornly low supply."
Freddie Mac News Facts
30-year fixed-rate mortgage (FRM) averaged 4.55 percent with an average 0.5 point for the week ending June 28, 2018, down from last week when it averaged 4.57 percent. A year ago at this time, the 30-year FRM averaged 3.88 percent.
15-year FRM this week averaged 4.04 percent with an average 0.5 point (unchanged from last week). A year ago at this time, the 15-year FRM averaged 3.17 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.87 percent this week with an average 0.3 point, up from last week when it averaged 3.83 percent. A year ago at this time, the 5-year ARM averaged 3.17 percent.
According to the National Association of Realtors, U.S. pending home sales decreased modestly in May 2018, and have now fallen on an annualized basis for the fifth straight month. A larger decline in contract activity in the South offset gains in the Northeast, Midwest and West.
According to Freddie Mac's May 2018 Outlook Report, swift U.S. home-price growth and the ongoing climb in mortgage rates this year have made buying a home more expensive, but home sales are still on track to squeak out a gain in 2018.
After two straight months of modest increases, pending home sales in U.S. dipped in April 2018 to their third-lowest level over the past year. All major regions saw no gain in contract activity last month.