U.S. long-term mortgage rates rise moderately, 30-year at 4.12%

by Ike Obudulu Posted on April 11th, 2019

McLean, Virginia: U.S. long-term mortgage rates rose moderately this week, remaining at historically low levels that can lure potential purchasers in the spring homebuying season. Mortgage buyer Freddie Mac said Thursday the average rate on the 30-year, fixed-rate mortgage increased to 4.12% from 4.08% last week. Two weeks ago, the benchmark loan rate marked its steepest weekly drop in a decade, from 4.28%.

The average rate on the 30-year loan stood at 4.42% a year ago.

The average rate this week for 15-year, fixed-rate home loans rose to 3.60% from 3.56%.

The declining trend in mortgage rates has made purchasing a home cheaper, and potential buyers have been rushing to take advantage of the lower borrowing costs.

Lower mortgage rates, slowing home price increases and a pickup in the number of available homes appear to be rejuvenating home sales after a slowdown last year.

Despite the increase in rates this week, “We expect mortgage rates to remain low …, boosting homebuyer demand in the next few months,” Freddie Mac chief economist Sam Khater said.

Freddie Mac surveys lenders across the country between Monday and Wednesday each week to compile its mortgage rate figures.

The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates.

The average fee on 30-year fixed-rate mortgages was unchanged this week at 0.5 point.

The average fee for the 15-year mortgage also was steady, at 0.4 point.

The average rate for five-year adjustable-rate mortgages jumped to 3.80% from 3.66% last week. The fee remained at 0.4 point.

Primary Mortgage Market Survey Definitions

Commitment Rate : The interest rate a lender would charge to lend mortgage money to a qualified borrower exclusive of the fees and points required by the lender. This commitment rate applies only to conventional financing on conforming mortgages with loan-to-value rates of 80 percent or less.

ARM Index ; The one-year Treasury

Loan to Value Ratio (LTV) : The ratio of the loan amount of a mortgage loan to the lower of the appraisal value or purchase price of the property securing the loan.

Origination Fees and Discount Points : The total charged by the lender at settlement. One point equals one percent of the loan amount.

Margin : A fixed amount added to the underlying index to establish the fully indexed rate for an ARM.

Primary Mortgage Market Survey

Since April 1971, Freddie Mac has surveyed lenders across the nation weekly to determine the average 30-year fixed-rate mortgage rate; in 1984, the 1-year ARM was added to the survey and the 15-year fixed-rate mortgage rate was included beginning in 1991. In January 2005, Freddie Mac added a 5/1 hybrid ARM series to the survey. In January 2016, the 1-year ARM was discontinued.

Currently, about 25 lenders from each of Freddie Mac’s five regions are surveyed each week. The mix of lenders surveyed approximates the volume of mortgage loans that each lender type originates nationwide.

Survey reminder emails are sent out on Mondays and lenders are asked to respond by close of business Wednesday. If we have received no response on Tuesday, Freddie Mac follows up with a reminder email on Wednesday morning. Freddie Mac receives a few responses on Monday, but most responses are returned on Tuesday with the balance received on Wednesday. So, in general, the PMMS rates reflect loans offered Monday through Wednesday.

The survey results each week are weighted based on the most recently released dollar volume of conventional, single-family originations within the Freddie Mac one-unit loan limit reported under the Home Mortgage Disclosure Act (HMDA) data – prior survey averages are not adjusted. The HMDA data are typically published in September of each year for the immediately prior year. To do the weighting, Freddie Mac takes the HMDA state origination volumes and aggregate them to the five regions to establish regional weightings. A national average is then calculated as the weighted average of the five regional averages. In addition, when calculating the regional averages, we discard any rate/point combination outlier that is more than one standard deviation from the region’s mean.

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