Mortgage rates near 3-year lows while 30-year average dips to 3.75%
MBS Highway founder & CEO Barry Habib gives his take on the U.S. housing market and explains why Americans should refinance their homes.
Long-term mortgage rates in the U.S. fell this week, nearing a three-year low.
The dip comes amid signals from Federal Reserve officials that they could cut the benchmark interest rate at their meeting next week.
Mortgage buyer Freddie Mac said Thursday that the average rate on the key 30-year mortgage dipped to 3.75 percent from 3.81 percent last week. Those are historically low levels for the 30-year rate, which a year ago stood at 4.54 percent.
The average rate for 15-year, fixed-rate home loans fell to 3.18 percent from 3.23 percent last week.
Freddie Mac said the improvement hasn’t impacted home sales yet, but there could be higher home sales later this year.
The mortgage loan company surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures.
On Wednesday, the U.S. Commerce Department said new home sales in the country rose modestly in June but remained below sales levels earlier this year.
The modest pace suggests low mortgage rates and a healthy job market aren't encouraging many more purchases.
New home sales increased 7 percent to a seasonally adjusted annual rate of 646,000, the department said. That is up from 604,000 in May but below April's figure of 658,000.
Through the first half of the year, purchases of new homes have increased by just 2.2 percent compared with the same period last year.
The small increase, along with a drop in existing home sales in June, suggests the housing market is still struggling to accelerate after slowing sharply last year. Rising prices for existing homes are outpacing wage growth and leaving many would-be buyers on the sidelines.
Sales of new homes soared more than 50 percent in the West, partially recovering after a sharp drop in May. They plunged 26.3 percent in the Midwest, where they have fallen nearly 18 percent compared with a year ago. Sales slipped 4.2 percent in the Northeast in June and barely ticked up by 0.3 percent in the South.
CLICK HERE FOR THE FOX BUSINESS APP
Prices for new homes have been more restrained than for existing ones. The median price for a new home was $310,400 in June, little changed from a year earlier. Median existing home prices rose 4.3 percent in June from a year ago, faster than the growth in average hourly pay.
The Associated Press contributed to this report.