Two weeks ago mortgage interest rates slipped below 3% for the first time on record and after briefly inching their way back across that threshold last week interest rates have returned to just under 3% once again. According to data released from Freddie Mac, interest rates on a 30-year loan are 2.99%, not quite the 2.98% they reached two weeks ago but slightly better than the 3.01% they settled on during the week in between.
For a 15-year loan the rates landed at 2.51%, down from 2.54% last week and 2.58% the week before that. This steady decrease, without the slight uptick we saw with 30-year loans last week, is another indication of how willing lenders are to give loans to buyers with a strong financial profile on their application.
“It’s Groundhog Day in the mortgage market as rates continue to remain near historic lows, driving purchase demand over 20 percent above a year ago,” said Sam Khater, Freddie Mac’s Chief Economist, referring to the June data released from the National Association of REALTORS this week. “Real estate is one of the bright spots in the economy, with strong demand and modest slowdown in home prices heading into the late summer. Home sales should remain strong the next few months into the early fall.”
While demand is expected to stay strong, the applications for a mortgage did take a slight dip over the past week. According to data from the Mortgage Bankers Association, purchase applications decreased by 1.4% compared to the week before. However, this is still 21% higher than it was one year before so demand is very comfortably on the increase.
Refinance applications saw a tiny decrease, of .4%, which is still 121% higher compared to the same week a year ago. The biggest shift took place with FHA refinance applications, which decreased by almost 18%. This is because rates for FHA loans increased, by about 14 basis points, to 3.37%, according to MBA data. FHA loans typically make up about 10% of all loans, and that held true last week when they were 9.6% of applications (down from 10.8% the week before).