Housing News

Mortgage Interest Rates 'Remain Relatively' Stable for Sixth Straight Week

Mortgage rates remained largely unchanged this week, extending a six-week stretch of stability that has kept borrowing costs in the mid-6% range.

The average rate on a 30-year, fixed-rate mortgage edged up to 6.49% for the week ending June 25, according to Freddie Mac. That was slightly higher than 6.47% a week earlier. But it remained firmly below the 6.77% average recorded at this time last year.

“Rates have remained relatively stable over the last six weeks,” said Sam Khater, Freddie Mac’s chief economist.

The recent stability may be helping borrowers adjust and plan ahead in today’s housing market after a spring marked by frequent swings in borrowing costs.

“A six-week stretch of stability, even at elevated levels, is a signal in and of itself,” said Jake Krimmel, senior economist at Realtor.com, in a statement.

Although rates have changed little in recent weeks, borrowing costs remain lower than they were a year ago. A homebuyer purchasing a $400,000 home with 20% down would pay about $61 less per month at this week’s average mortgage rate than they would have a year ago.

At 6.49%, the monthly principal and interest payment comes to roughly $2,019, compared with about $2,080 when rates averaged 6.77% at this time last year. Over 12 months, that amounts to about $732 in savings, or roughly $22,000 over the life of a 30-year fixed-rate loan.

While home purchase activity has eased modestly in recent weeks, said Khater, refinance activity has continued to pick up as borrowers respond to today’s rates.

Purchase mortgage applications decreased 12% in the week ending June 19 compared to the previous week, according to the Mortgage Bankers Association’s unadjusted Purchase Index. But applications were up 3% compared to the same time last year.

Refinance applications were up 3% from the previous week and increased 17% year-over-year, according to the association.

The combination suggests many homeowners are taking advantage of opportunities to lower their borrowing costs and prospective homebuyers continue to adjust to mortgage rates that have held relatively steady for more than a month.