The 30-year fixed-rate mortgage averaged 5.04 percent for the week of September 24, unchanged from a week earlier according to Freddie Mac's weekly primary mortgage market survey. The popular mortgage rate has hovered near the historically low 5 percent level for the past 3 months.
Historically low mortgage rates are keeping homes affordable and are enticing first-time homebuyers to purchase homes. Affordability measures have been hovering near record levels all year long.
The survey also reported that the 15-year fixed-rate mortgage was 4.46 percent for the current week compared to a 4.47 percent rate posted in the prior week. Similarly, the 1-year adjustable-rate mortgage was 4.52 percent in this week's survey compared to a 4.58 percent rate in last week's survey.
A weekly survey conducted by the Mortgage Bankers Association also released on Wednesday, reported that in the week ending September 25, mortgage applications to refinance fell 0.8 percent from a week ago, while mortgage applications to purchase homes dropped 6.2 percent from the prior week. The MBA reported that mortgage rates slightly declined during the week, compared to Freddie Mac's survey which had mortgage rates holding steady.
In its September 23rd policy statement, the Federal Reserve indicated that it plans to keep its benchmark interest rate exceptionally low for an extended period. This bodes well for the direction of future mortgage rates. The Fed's announcement will particularly benefit households who opted for adjustable-rate mortgages because they are typically tied to shorter-term interest rates. The Fed also noted that both the economy and housing markets have shown improvement.