When the Federal Reserve increased the interest rate it charges banks in December I thought for sure that our buyers would be paying higher rates by now. Normally banks follow the lead of the Fed and pass on their expense to the public. Not so this time around. The difference is that today there are several investors buying mortgage backed securities.
Lenders are forced to keep their rates down in order capture loans to offer these investors. This mortgage market is a win for buyers directly and a win for sellers indirectly. Here is Freddie Mac's official press release:
30-year fixed-rate mortgage (FRM) averaged 3.59 percent with an average 0.5 point for the week ending April 7, 2016, down from last week when they averaged 3.71 percent. A year ago at this time, the 30-year FRM averaged 3.66 percent.
15-year FRM this week averaged 2.88 percent with an average 0.4 point, down from last week when it averaged 2.98 percent. A year ago at this time, the 15-year FRM averaged 2.93 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.82 percent this week with an average 0.5 point, down from last week when it averaged 2.90 percent. A year ago, the 5-year ARM averaged 2.83 percent.
Keller Williams Southern Arizona