Information compiled by Freddie Mac shows that mortgage rates decreased on a month-over-month basis. As of end of February, the 30-year FRM – Commitment rate, declined by 16 basis points to 3.47 percent from 3.62 percent in January. The cycle peak was 4.87 percent in 2018 November.
Given the recent market volatility, the Federal Reserve cut the benchmark interest rate by 50 basis points on March 3rd during an inter-meeting to a range of 1.00-1.25 percent. Outlook expressed by FOMC members noted that the “fundamentals of the U.S. economy remain strong.” However, the Fed’s statement noted that the virus poses “evolving risks to economic activity.
At the end of December, the 10-year Treasury rate, was at 1.92 percent. Currently, it stands at 1.04 percent. The recent decline in the 10-year Treasury rate has contributed to lower mortgage interest rates in the last few weeks. The average 30-Year Fixed market rate, according to Freddie Mac, is was at 3.45 percent at the end of February. At NAHB, we expect the mortgage rates to decline further to near 3 percent as bond market rates decline due to the coronavirus COVID-19 fears. At the beginning of 2019, the average 30-Year Fixed market rate was 4.51 percent.