As mortgage rates fall alongside the stock market back to their low levels of the summer, home sales could ultimately benefit, according to Freddie Mac.
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“Rates continued their two-month slide and are currently hovering around the same level as the early summer, which was before the deterioration in home sales,” Sam Khater, Freddie Mac’s chief economist, said in a press release. “The negative headlines around the financial markets are concerning but the economy remains healthy, so the drop in mortgage rates should stem or even reverse the slide in home sales that occurred during the second half of 2018.”
The 30-year fixed-rate mortgage averaged 4.55% for the week ending Dec. 27, down from last week when it averaged 4.62%. The 30-year fixed-rate mortgage averaged 3.99% during the same period a year ago.
Since reaching a seven-year high in early November, rates dropped 39 basis points.
The 15-year fixed-rate mortgage averaged 4.01%, falling six basis points from last week. It averaged 3.44% this same time last year.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4% with an average 0.3 point, up from last week when it averaged 3.98%. The five-year adjustable-rate mortgage averaged 3.47% during this same period a year ago.
“While it’s certainly important to keep track of home values and interest rates and plan your budget accordingly, buyers shouldn’t base their decisions on those moving targets. A home is the most valuable asset that most people will ever own, so it’s especially important not to gamble with it,” said Zillow Senior Economist Aaron Terrazas when that company released its own rate tracker.
“In the end, the best time to buy a home is always when the time is right for an individual buyer — often when they’re financially ready, when they’re relocating to a new area or a major life event requires them to upsize or downsize. It’s also important to remember that rates on a typical mortgage remain very low by historic standards — especially given the type of strong economic growth we’ve been experiencing,” said Terrazas.