Housing News

Mortgage Interest Rates Tick Down Ever So Slightly

Mortgage interest rates ticked down just a bit as the busy spring homebuying season continued.

Rates averaged 6.36% for 30-year, fixed-rate loans in the week ending May 14, according to Freddie Mac data. That was a slight decrease from 6.37% in the previous week.

And it was nearly half a percentage point lower than this time last year, when rates averaged 6.81%.

“While purchase demand is softening, it remains above this time last year,” Freddie Mac Chief Economist Sam Khater said in a statement. “Recent data also shows existing-home sales modestly edging up.”

Many homebuyers and homeowners don’t realize that even small changes in rates can make a big difference in their monthly mortgage payments.

Homebuyers purchasing a $400,000 home, with 20% down, would save nearly $100 a month on their housing payments with today’s rates versus the higher rates a year ago.

In a year, that adds up to an additional $1,140 and more than $34,000 in savings over the life of a 30-year, fixed-rate loan.

Mortgage applications to buy a home ticked up 7% in the week ending May 8 compared to a year earlier, according to the Mortgage Bankers Association (MBA).

Homeowners hoping to lower their monthly mortgage bills submitted 28% more applications to refinance their existing loans than they did a year ago, according to MBA.

“All loan types show[ed] increases in purchase activity, as potential homebuyers shrugged off the current economic and mortgage rate uncertainties and returned to the market,” said Joel Kan, MBA’s deputy chief economist, in a statement.