For the third straight month, information compiled by Freddie Mac shows that mortgage rates continued to fall in February 2019. The 30-year FRM – Commitment rate, fell by nine basis points to 4.37 percent from 4.46 percent in January. The cycle peak was 4.87 percent in November.
The Federal Housing Finance Agency reported that the contract rate for newly-built homes, also declined by fourteen basis points to 4.58 percent in February. Mortgage rates on purchases of newly built homes (MIRS) declined by fourteen basis points over the month of February to 4.46 percent from 4.60 percent in January.
The Fed adopted a “dovish” stance at the March Federal Open Market Committee meeting. As expected, it kept the target for the federal funds rate at its setting of 2.25-2.50 percent. The post-meeting statement removed any mention of future rate hikes for 2019 and possibly a single rate hike in 2020. Chairman Powell reiterated that the outlook for the US economy remains “favorable” and “positive.” At the same time, he acknowledged potential headwinds to the economy, such as Brexit, slowing global growth, and softening economic data. The statement also mentioned that the Fed will slow the process of balance sheet reduction beginning in May and will conclude that in September.
As of the end of March, the 10-year Treasury rate, is trending down to 2.43%. This decline has contributed to the mortgage interest rates reductions in the last few weeks. The average 30-Year Fixed market rate, according to Freddie Mac, was 4.28% at the end of March. At the end of 2018, the average 30-Year Fixed market rate was 4.64%.