Mortgage rates are hovering around a three-year low, according to Freddie Mac’s latest report Primary mortgage market research.
The average 30-year fixed-rate mortgage reached 6.09 percent this week, while the average 15-year fixed-rate mortgage reached 5.44 percent. Both measures are higher than last week; however, they are lower than last year, when the average 30- and 15-year mortgage rate was 6.96 percent and 6.16 percent, respectively.
“With the economy improving and the average 30-year mortgage rate nearly one percentage point lower than last year, more homebuyers are entering the market,” the report said. “Buyers should always shop for the best rate as multiple quotes could potentially save them thousands.”
The drop in interest rates has stimulated activity among some home buyers and home sellers Redfin reports Thursday that mortgage purchase applications and new listings improved during the four weeks ending January 18. Mortgage purchase applications rose 5 percent week on week, while new listings recorded the smallest decline since November (-1.6 percent).
The drop in interest rates has lowered the average monthly home payment in the U.S. by 6.3 percent year over year to $2,441. Still, homebuyers are taking their time to finalize the deal, with a typical home sitting on the market for 61 days before the contract is signed – a week longer than last year. Redfin said the lull is mainly due to the market tilting in buyers’ favor, allowing them to negotiate prices and other incentives.
“Buyers have much more power than they have had in recent years,” Redfin Premier agent Ben Ambroch said in the report. “Many buyers give up a 3 percent mortgage rate for a 6 percent mortgage rate, so they have high standards for their new home.”
“Buyers negotiate prices and request repairs based on inspections,” he added. “Sellers are more willing to compromise because listings sit on the market longer; the sellers who have to move are eager to get a deal done.”
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