Mortgage rates continue downward fall, sending sales up with them

Rates no longer on the rise

Mortgage rates are still on the decline, despite a recent rate hike from the Federal Reserve. This dip is likely behind the most recent increase in existing home sales — the first such jump in more than six months, according to Freddie Mac.

Rates head downward

Mortgage rates continued their recent decline last week, giving 2019 homebuyers even more reason for optimism as we head into the new year.

According to the Primary Mortgage Market Survey from Freddie Mac, rates on 30-year fixed-rate mortgages dropped last week, averaging 4.62 percent. That’s down from 4.63 percent the week before, but still up from this time last year (when rates sat at 3.94 percent).

Rates on 15-year adjustable-rate mortgages stayed the same at 4.07 percent, while 5-year adjustable-rate mortgages dipped from 4.04 percent to 3.98 percent.

In early November, rates hit their highest point in years. Rates on 30-year mortgages peaked at 4.94 percent, while 15-year ARMs topped out at 4.36 percent.

Lower rates, higher sales

Freddie Mac Chief Economist Sam Khater attributes the most recent jump in existing home sales to these dipping rates. It likely means sales will rise further as we get into early 2019.

“The response to the recent decline in mortgage rates is already being felt in the housing market,” Khater said. “After declining for six consecutive months, existing home sales finally rose in October and November and are essentially at the same level as during the summer months. This modest rebound in sales indicates that homebuyers are very sensitive to mortgage rate changes – and given the further drop in rates we’ve seen this month, we expect to see a modest rebound in home sales as well.”

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