Mortgage rates dropped this week, with the 30-year loan dipping back below the 5% mark, according to Freddie Mac.
The average rate for a 30-year fixed-rate mortgage dropped to 4.99% for the week ending Aug. 4, according to Freddie Mac’s Primary Mortgage Market Survey. This is down from last week when it averaged 5.3% but up from 2.77% last year.
Similarly, the 15-year mortgage also decreased to 4.26%, down from 4.58% last week but up from 2.1% last year. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) decreased to 4.25%. This is down from 4.29% last week but up from 2.4% last year.
"Mortgage rates remained volatile due to the tug of war between inflationary pressures and a clear slowdown in economic growth," Freddie Mac Chief Economist Sam Khater said. "The high uncertainty surrounding inflation and other factors will likely cause rates to remain variable, especially as the Federal Reserve attempts to navigate the current economic environment."
If you are interested in taking advantage of lower mortgage rates, you could consider refinancing your loan to lower your monthly mortgage payment or save money over the life of the loan. Visit Credible to find your personalized interest rate without affecting your credit score.
FED RAISES INTEREST RATES AGAIN — HERE’S HOW IT AFFECTS YOUR WALLET
Fannie Mae recently forecasted that it is likely the economy will see a recession this year. The mortgage company's Economic and Strategic Research (ESR) Group projected that real gross domestic product (GDP) will increase 0.1% in 2022 and then decrease 0.4% in 2023, according to its July commentary.
In the first quarter of 2022, real GDP decreased by 1.6% annually, according to the Bureau of Economic Analysis (BEA). The GDP then contracted again by 0.9% annually in the second quarter, hitting the technical definition of a recession.
"While underlying economic conditions show resilience, the recession narrative is playing an important role in market psychology and investor expectations, as we see the sharp upward push in rates moderate more visibly," George Ratiu, Realtor.com's manager of economic research, said in a statement.
If you are interested in taking advantage of mortgage rates while they are lower, you could consider refinancing your home loan. Visit Credible to compare multiple mortgage lenders at once and choose the one with the best interest rate for you.
BANK OF AMERICA SAYS TO EXPECT 'MILD RECESSION' THIS YEAR
The Federal Open Market Committee (FOMC) raised rates at its July meeting by 75 basis points in an effort to combat rising inflation, bringing the target range for the federal funds rate to 2.25% to 2.5%. The Federal Reserve also previously raised interest rates by 75 basis points in June, marking the largest rate hike since 1994. And more rate hikes from the central bank are likely on the horizon.
"Inflation continues to run too high, and the Fed remains committed to slowing it, even if it leads to a recession," Mike Fratantoni, Mortgage Bankers Association (MBA) senior vice president and chief economist, said in a statement at the time of the Fed’s July announcement. "Further rate increases are baked in through at least the remainder of this year. The unanimous vote for this rate increase emphasizes the commitment to this path."
As the Fed raises the federal funds rate, mortgage rates will also likely rise. You can take advantage of today’s lower mortgage rates by refinancing your home loan. To see if this is the right option for you, contact Credible to speak to a mortgage loan expert and get your questions answered.
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