Average interest rates on fixed-rate mortgages dipped considerably on Freddie Mac’s records, as the mortgage buyer announced the results of its new weekly survey on Thursday.
According to Freddie Mac, 30-year fixed-rate mortgages dropped from 4.51 percent to 4.41 percent last week, a decline of ten basis points. 15-year fixed home loans were down by even more, dipping 11 basis points from 3.56 percent to 3.45 percent. This brought rates closer to their record lows, though they remain significantly higher than they were one year ago, and higher than they were in early May.
Mortgage rates have jumped by approximately one percentage point since May, as talk of the Federal Reserve tapering its bond-buying stimulus had driven rates upwards, particularly in the summer months. The Fed decided in December that it would begin tapering stimulus based on present economic conditions, with its bond purchases reduced from $85 billion to $75 billion a month effective this month.
The spike in mortgage rates had also resulted in a softening of the home purchase market; home purchase statistics have dropped for three consecutive months. But with all things taken into consideration, 2013 still represented a very strong year for housing, and possibly the strongest year since the recession.
Financial experts generally believe that home sales and pricing stats will continue going up in 2014, albeit at a slower rate than last year. Mortgage rates are also expected to increase this year, with some expecting rates closer to 5 percent for 30-year fixed products by the end of 2014.