Interest rates for home loans have leveled off at a notch above their record lows, a Freddie Mac survey shows, with the 30-year fixed mortgage averaging 3.53% this week, the same as last week.
The survey of lenders, released Thursday, showed the 15-year fixed-rate mortgage averaging 2.77%, down from 2.81% a week ago. The start rates for adjustable mortgages also declined.
Freddie Mac asks lenders each week what terms they are offering to well-qualified borrowers. In the current survey the 30-year borrowers would have paid an average 0.8% of the loan amount in upfront lender fees and points, and 0.7% of the loan amount for the 15-year loan.
The typical rate for a 30-year fixed mortgage bottomed out last fall at 3.31%.
Prospective buyers and refinancers are well aware that the rates can’t stay near record lows forever, said mortgage broker George Duarte, president of Horizon Financial Associates in Fremont.
“People are just scrambling to get things locked in. They know the low-rate party will be over at some point,” he said. “The question is when?”
As the economy improves, “Investors are less inclined to stash cash in bonds as they look for greater returns,” Keith Gumbinger, vice president of loan information publisher HSH.com, said in a separate report this week.
“And that, in turn, lifts yields and mortgage rates,” he said. But he added that the headway for additional increases is limited.
“We are at best still in a slow-growth pattern with little forward momentum,” Gumbinger said.
“Couple this with current Federal Reserve policy to keep mortgage rates low and plenty of fiscal challenges yet to be addressed, and it seems unlikely that rates can go much higher that what we have presently.”