Mortgage rates fell again last week and are again near record lows.
According to Freddie Mac, the average rate for a 15-year fixed rate mortgage did achieve a record low of 2.61 percent as compared to 3.1 percent one year ago.
The average rate for a 30-year fixed rate mortgage fell to 3.40 percent and near the record low of 3.31 percent.
Low mortgage rates are helping homeowners with refinancing and are boosting housing markets as more buyers can qualify for mortgage loans.
Home Values Continue To Rise
Last week’s economic news was mixed; The Federal Housing Finance Agency, which oversees Freddie Mac and Fannie Mae, released its Home Price Index for February.
According to this index, home prices increased by 0.7 percent between January and February, and increased by 7.1 percent year-over-year on a seasonally adjusted annual basis.
According to the National Association of REALTORS®, existing home sales for March fell short of the expected 5.03 million and came in at 4.92 million existing homes sold on a seasonally adjusted annual basis.
This reading was also 0.7 percent shy of February’s reading of 4.95 million existing homes sold.
Some homeowners may be taking a wait-and-see stance as they wait for home values to continue rising.
Employment Numbers Gaining Steam
Weekly jobless claims fell to 339,000 and were short of the consensus of 351,000 and the prior week’s 355,000 jobless claims filed.
As more workers gain employment, those able to buy homes increases.
The economy in general also benefits as households gain income they can use for purchasing goods and services.
Consumer Sentiment rose by 2.1 points to 76.4 over the March reading of 72.3 percent.
April’s reading also surpassed expectations of 74.0 percent.
As consumers gain confidence in the economy, they are generally more likely to buy homes and make other major purchases that contribute to the U.S. economy.
Coming Up this Week
This week’s economic news calendar includes several reports that impact the housing sector as well as the general economy:
- Monday: Personal Income, Consumer Spending and Pending Home Sales reports are due for release.
- Tuesday: The Case Shiller/Wells Fargo Home Price Index for February and Consumer Confidence for April will provide data concerning national and regional home prices and indicate how consumers view the economy.
- Wednesday: The customary statement by the Federal Open Market Committee (FOMC) is set for release at the conclusion of its meeting. The ADP Employment Index for April and Construction Spending for March provide data on jobs and trends in construction spending.
- Thursday: Weekly Jobless Claims report
- Friday: The Non-farm Payrolls Report and Unemployment Rate for April, collectively known as the Jobs Report, will be released.
While we can’t predict what will happen with mortgage rates, some industry analysts indicated that they expect rates to remain low in the near-term.
These lower rates should continue to support growth in the Chicago real estate market for home buyers and sellers as well as those looking to refinance their home.