Freddie Mac: 30-year mortgage rate falls sharply to 4.13%
Here’s one clear effect of the government shutdown: Mortgage rates have tumbled to their lowest level since spring.
Freddie Mac said Thursday that lenders were offering the 30-year loan early this week at an average 4.13%, down from 4.28% last week.
The average rate for a 15-year fixed mortgage, often a choice when homeowners refinance, also dropped sharply, averaging 3.24% compared with last week’s 3.33%.
“The partial government shutdown led to market speculation that the Federal Reserve will not alter its bond purchases this year,” said Freddie Mac’s chief economist, Frank Nothaft.
The bond-buying program is designed to stimulate the economy by keeping rates down.
A weak employment report for September added to the expectation that the Fed would leave the stimulus intact, Nothaft said. The economy added 148,000 jobs, less than economists had expected and down from an increase of 193,000 jobs in August.
This week’s rate for the 30-year home loan was the lowest since the week of June 20, when the rate averaged 3.93%. It shot up to 4.46% the following week on expectations the Fed would start to taper off the bond purchases in September, a development that did not occur.
Freddie Mac asks lenders early each week about the terms they are offering to solid borrowers on popular loans. The borrowers would be paying less than 1% of the loan amount in upfront fees and discount points to the lenders.
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