A week after hitting 3%, the average 30-year fixed-rate mortgage fell again as inflation concerns temporarily subsided.
The average 30-year term mortgage fell to 2.95% for the week ending May 27, from 3% the previous week, according to Freddie Mac's weekly primary mortgage market survey. A year ago the average was 3.15%.
The 30-year median rate changed dramatically in 2021, often in response to fears that inflation concerns could necessitate a hike in interest rates. However, the recent rate hikes have largely retreated as a result, as experts largely shook off data pointing to possible overheating of the US economy, such as the sharp rise in consumer goods prices.
"Statements by the Presidents of the US Federal Reserve and the President of the European Central Bank have shown the markets that central banks are relatively unaffected by the recent sharp rises in inflation and are confident of containing the effects of rising prices without slowing the economic recovery," said Zillow economist Matthew Speakman.
Relatively low and stable interest rates – the 30-year average has stayed below 3% for most weeks since July last year – should continue to encourage homeowners to seek refinancing, Freddie Mac's chief economist Sam Khater said in a published statement.
"Homeowners who refinanced their 30-year fixed-rate mortgage in 2020 have saved more than $ 2,800 annually," he added by at least a half percentage point. "
Homeowners have noted this this year as the refinancing rate of total mortgage application volume has remained above 60% for one week, according to reports from the Mortgage Bankers Association. Strong refinancing activity is due to the fact that the housing stock remains low and new home purchases are falling.
The 15-year term mortgage average also saw a weekly decrease of 2.27% from 2.29% a week earlier. At the same time a year ago, the average was 2.62%.
The 5-year average of the variable rate mortgage-indexed mortgages did not change and remained at 2.59% week after week. In the same week of 2020, the average 5-year ARM was 3.13%.