We may only be six weeks in, but 2019 appears to be shaping up as a better year for buyers than 2018.
Setting the stage for solid springtime sales, 30-year fixed rate mortgage rates recently hit a 10-month low, according to Freddie Mac.
“The U.S. economy remains on solid ground, inflation is contained and the threat of higher short-term rates is fading from view, which has allowed mortgage rates to drift down to their lowest level in 10 months,” said Sam Khater, Freddie Mac’s chief economist. “This is great news for consumers who will be looking for homes during the upcoming spring homebuying season. Mortgage rates are essentially similar to a year ago, but today’s buyers have a larger selection of homes and more consumer bargaining power than they did the last few years.”
In addition to lower mortgage rates, buyers are pleased to see growing home inventories across the country. For years, limited inventories have made markets more competitive and provided buyers with fewer options, said Realtor Magazine chief economist Danielle Hale. But while many experts agree that inventories will grow, Hale said the increasing supply still may not boost the number of homes listed under $300,000.
Another positive development for buyers is that home price growth is slowing down. Home price growth will likely slow its pace when compared to previous years, said Hale adding that she predicts a 2.2 percent increase in home prices this year.
“We do still anticipate rising home prices, particularly for below-median-priced homes, so buyers in that price range may have some incentive to buy sooner rather than later,” Hale said.
Here Freddie Mac’s recent averages with mortgage rates for the week ending Feb.7:
- 30-year fixed-rate mortgage (FRM) averaged 4.41 percent with an average 0.4 point for the week ending February 7, 2019, down from last week when it averaged 4.46 percent. A year ago at this time, the 30-year FRM averaged 4.32 percent.
- 15-year FRM this week averaged 3.84 percent with an average 0.4 point, down from last week when it averaged 3.89 percent. A year ago at this time, the 15-year FRM averaged 3.77 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.91 percent with an average 0.3 point, down from last week when it averaged 3.96 percent. A year ago at this time, the 5-year ARM averaged 3.57 percent.
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