30-Year Mortgage Rate Remained At 3%, Supporting Prices

30-year mortgage restes

Even though the 30-year mortgage rate rebounded this week, it remained at or below 3% for the fifth straight week. This move supported prices of both existing and new home sales.

30-Year Mortgage Rate Remained At or Below 3% For The Fifth Straight Week

According to Freddie Mac, the 30-year fixed-rate mortgage (FRM) averaged 3% for the week ending May 20, 2021. It was up from the previous week when it averaged 2.94 percent. A year ago at this time, the 30-year FRM averaged 3.24%. In this context, Sam Khater, Freddie Mac’s Chief Economist said “After a run up over the first few months of the year, rates have paused and hovered around three percent since March.“

Over the same period, Freddie Mac report also showed the 15-year fixed-rate mortgage rose slightly. It averaged 2.29%, up from 2.26% last week. A year ago at this time, the 15-year FRM averaged 2.70%.

Low Mortgage Rates Kept Supporting Housing Prices Of Both Existing And New Home Sales

Coupled with a shortage of homes for sale, low mortgage rates are supporting housing prices. On Friday, the National Association of Realtors (NAR) revealed the median existing-home price for all housing types in April reached a record high of $341,600. It increased by 19.1% YoY, marking 110 straight months of YoY gains.

In the meantime, a Bloomberg article also highlighted that new home prices are booming. It noted “Buyers are stampeding for new homes as remote work upends employment, while soaring lumber costs and a shortage of workers are slowing construction. The result is home prices, already reaching unaffordable levels for many Americans, are set to keep rising.“

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Disclaimer: Mr. Christophe Barraud could not be held responsible for the investment decisions or possible capital losses of users. Mr. Christophe Barraud endeavors to provide the most accurate ...

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