Fixed mortgage rates edged lower this week, with Freddie Mac’s survey of lenders showing an average of just below 4 percent for 30-year fixed home loans.
Lenders told Freddie they were offering 30-year loans to solid borrowers at an average of 3.99 percent, down from 4.01 percent last week and 4.22 percent a year ago.
Fifteen-year fixed mortgages averaged 3.17 percent, down from 3.2 percent last week and 3.27 percent a year ago, according to the government-controlled loan buyer, which polls lenders each week on the terms they are offering to low-risk borrowers.
The 30-year mortgage rate started the year at 4.5 percent amid expectations it would rise, but it instead trended down and has been in the 4 percent range since mid-October.
This week’s comment from Freddie Mac’s chief economist, Frank Nothaft, showed mixed indicators for the housing market: “Housing starts declined 2.8 percent in October below the upwardly revised September rate. However, building permits increased 4.8 percent in October after a 2.8 percent boost a month earlier. Lastly, industrial production slipped by 0.1 percent, below the market consensus forecast.”
Freddie Mac’s survey asks lenders about the terms of loans they are offering to borrowers who have 20 percent down payments and who pay half of 1 percent of the loan amount in upfront lender fees and discount points. Payments for such services as appraisals and title insurance are not included.
The survey provides a consistent gauge of mortgage trends, but actual rates adjust constantly and are influenced by many factors. In addition to borrowers’ credit histories and debt loads, the factors include whether the borrowers opt for zero-cost loans at higher rates or pay extra to lenders initially to lower the rates.