Housing News

Mortgage Rates Keep Coming Down

Mortgage interest rates continued to fall as the spring housing market heats up.

Rates declined to an average of 6.23% for 30-year, fixed-rate loans in the week ending April 23, according to Freddie Mac data.

That was down from 6.3% in the previous week. And it was more than half a percentage point lower than this time last year, when rates averaged 6.81%.

“Rates currently stand at their lowest level in the last three spring homebuying seasons,” said Freddie Mac Chief Economist Sam Khater in a statement.

“This improvement, coupled with a pickup in purchase applications and refinance activity, as well as an increase in monthly pending home sales, underscores signs of improving momentum in the market,” Khater added.

Even small reductions in rates can equal big savings, leading to lower monthly mortgage payments for those who buy a home or refinance their existing mortgage.

Someone who purchased a typical home with a 6.23% rate would save $127 a month compared to buying the same home with a 6.81% rate. That adds up to more than $1,500 a year and nearly $46,000 over the life of a 30-year, fixed-rate loan.

(This assumes they purchased a $415,450 home, the median home list price in March according to Realtor.com, with 20% down. It does not include property taxes, insurance, or homeowner association costs.)  

Mortgage applications to purchase a home increased 14% year-over-year in the week ending April 17, according to the Mortgage Bankers Association (MBA).

Refinance applications were up 52% compared to the same time last year.

Both seemingly signify how aware homebuyers and homeowners are of rate declines.

“Mortgage rates declined last week as financial markets responded positively to the Middle East ceasefire and the lower trend in oil prices,” said MBA Chief Economist Mike Fratantoni in a statement.

“Despite the geopolitical uncertainty, housing demand is being supported by a still resilient job market, and homebuyers are experiencing a buyer’s market in most of the country given the higher levels of [housing] inventory relative to last year,” he said.