After three straight week of increases, the average mortgage rate in the United States declined last week. A decline in mortgage rates gives home buyers more buying power. While spring is already expected to be busy for home buyers, this drop could encourage even more to make a purchase.
Mortgage giant Freddie Mac said that the average rate on a 30-year fixed rate mortgage went from 3.73 percent to 3.71 percent. The average rate on a 15-year fixed mortgage rate slipped from 2.99 percent to 2.96 percent. Rates on adjustable 5 year mortgages slipped as well. Their average rate was 2.89 percent, down from 2.93.
“After the Federal Reserve’s decision last week to keep a key interest rate unchanged in light of global economic pressures, prices of U.S. government bonds have risen sharply. That has pushed down the yields on the bonds, which mortgage rates follow,” the Associated Press wrote.
10-year Treasury bond yields were at 1.87 percent last Wednesday, a drop from 1.91 percent the week prior. The yield then dropped again to 1.85 percent by Thursday.
The Mortgage Reports website helped describe how this decrease helps home buyers. For example, they wrote, if you could afford a $400,000 home in December, today, you can afford a home for $416,000 — an increase of 4% to your purchasing power. Home buyers are in a great place with the current average mortgage rate.
However, mortgage rates are fluctuating all the time. If you are considering buying a home, do not wait. Have you been waiting for the right time to buy the Miami home you have been eying? Call a RE/MAX Paradise agent today and take advantage of these low rates.