Fixed mortgage rates reversed course this week and headed back down, according to Freddie Mac’s latest survey, with the average rate for a 30-year fixed-rate loan dropping to 3.54% from 3.63% last week.
The 15-year fixed home loan averaged 2.72%, down from 2.79% a week ago, Freddie Mac said.
The survey asks mortgage originators what they are offering to solid borrowers who pay less than 1% of the loan amount in upfront lender fees. Paying extra discount points can lower the rate. The survey doesn’t include third party charges that borrowers often pay, such as for appraisals and title insurance.
The 30-year mortgage rate averaged 4.08% last year at this time. After bottoming out at 3.31% last fall, it climbed above 3.5% in late January and has remained there.
Frank Nothaft, Freddie Mac’s chief economist, said the big finance company expects 30-year rates to remain below 4% for the rest of 2013 – an extraordinarily low level by historic standards. He noted that the Federal Reserve this week cut the upper end of its inflation range forecast.
“Low and stable inflation is placing downward pressure on fixed mortgage rates,” Nothaft said. “Annual growth in the consumer price index has remained at or below 2% for the past four months, and for the producer price index even lower.”