Mortgage Rates—and Affordability—Are Down
The most recent Freddie Mac Primary Mortgage Market Survey showed that we are now in uncharted territory with regard to home mortgage rates. The average 30-year fixed rate mortgage came in at 2.65%, the lowest rate in the survey’s history, dating back to 1971. 15-year fixed rate mortgages averaged 2.16%. Since then, rates have climbed up a bit, to 2.93% (30-year fixed) and 2.47% (15-year fixed), which is still at historically low levels.
Unfortunately, housing is not becoming more affordable as a result. Home prices have risen faster than rates have fallen; average prices were up 7.9% in October compared with 12 months previous, and the National Association of Realtors is expecting new home prices to rise by 21% this year, while existing home prices will climb 9%. Those predictions might be higher than reality, however, since there is a chance that the foreclosure moratoriums in place today will be allowed to expire later this year.