Mortgage interest rates as reported by Freddie Mac on May 7 were low and in normal circumstances would engage consumers in homebuying activity. However, weak consumer confidence and worries about the labor market with the onset of a deep recession will outweigh the affordability of mortgage rates for all but the most qualified potential purchases of a home.
The Freddie Mac rate for a 30-year fixed rate mortgage hit a new weekly low of 3.26% in the May 7 data, down 3 basis points from the prior week. The rate was 4 basis points below the 3.30% average for April.
The rate for a 15-year fixed rate mortgage was down 4 basis points from the previous week to 2.73% in the May 7 data, and was 7 basis points below the 2.80% average for April.
The 5/1-year ARM rate was down 12 basis points to 3.17% as of May 7, its lowest since 3.11% in the March 19 week just before the volatility associated with the COVID-19 pandemic were particularly hard on credit markets. The rate was also 12 basis points below the 3.29% average for April.
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