Mortgage Giant, Freddie Mac released this weeks Prime Mortgage Market Survey (PMMS) showing the average mortgage rates on a fixed rate mortgage dropping to the lowest level in 2017.
The surveys reveals the following:
30-year fixed-rate mortgage (FRM) averaged 4.02 percent with an average 0.5 point for the week ending May 18, 2017 showing a slight drop from last week when it averaged 4.05 percent.
15-year FRM this week averaged 3.27 percent with an average 0.5 point, showing a small decline from last week when it averaged 3.29 percent.
5/1-year ARM averaged 3.13 percent this week with an average 0.5 point, declining slightly from last week when it averaged 3.14 percent.
This weeks survey closed prior to Wednesdays flight to quality, Sean Becketti, Freddie Mac chief economist, said in a statement. The delayed impact of the associated decline in Treasury yields may push mortgage rates lower in next weeks survey.
The political uncertainty is making investors anxious causing them to pull back from stocks and invest in bonds. In one week alone, the yeild on the 10 year Treasury has gone down 20 basis points.
Recent political turmoil and some not-so-great economic data have the stock market a bit jittery, David Kuiper, vice president of Northpointe Bank in Holland, Michigan said. This benefits the bond market (where mortgage interest rates are priced), as investors look for certainty and to avoid volatility. Kuiper predicts that the rates on home loans will continue to get lower.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.