30-Year Mortgage Rate Falls


For the second straight month, information compiled by Freddie Mac shows that mortgage rates continued to fall in January 2019. The 30-year FRM – Commitment rate, fell by another 17 basis points to 4.46 percent from 4.64 percent in December. 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 seven basis points to 4.72 percent in January. Mortgage rates on purchases of newly built homes (MIRS) declined by twenty-three basis points over the month of January to 4.60 percent from 4.83 percent in December.

The Fed signaled patience at the January 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, while Chairman Powell, during his post-meeting press conference, articulated that he had no strong prior whether the next Fed adjustment to interest rates would be up or down. He did not rule out the possibility that the current Fed pause could evolve into an end to the process of rate hikes and removal of monetary accommodation that began in December 2015.

Since the beginning of January, the 10-year Treasury rate, has slightly recovered to 2.72% but lower than 3.21% at the start of November. 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 4.35% at the end of February.

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