As of the March 5 weekly data, the Freddie Mac rate for a 30-year mortgage was 3.29%, down 16 basis points from the prior week and a series low either for weekly data or monthly averages.
The rate for at 15-year fixed mortgage also fell 16 basis points to 2.79% from the prior week and was the lowest weekly rate since 2.78% in the October 27, 2016 data.
These sorts of rates are likely to be a compelling argument to buy a home now or to refinance an existing mortgage to improve household balance sheets. It may also be an opportunity to extract some equity and still keep monthly payments low. However, the narrow supply of homes available for purchase means that there may be more upward pressure on home prices in advance of the spring selling season. Sellers may be seeing a shift back to their advantage.
Adjustable rate mortgages tend to fall out of favor when mortgage rates are low. Even though rates for a 5/1-year ARM were down to 3.18% in the March 5 report and the lowest since 3.17% in the October 19, 2017 week, the certainty of locking in a fixed rate will make ARMs a less attractive option to all but a narrow segment of homebuyers or refinancers.
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