Freddie Mac says mortgage rates easing a bit

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Borrowers who feared home loans rates might spike back above 5% are breathing easier this week.

With a weaker-than-expected job report allaying inflation fears, investors bought Treasury bonds, driving down their yields. And as mortgage watchers know, home-loan rates tend to follow Treasuries -- in this case reaching a four-week low.

Freddie Mac, the big government-controlled mortgage finance company, said Thursday that lenders were offering 30-year fixed rate mortgages at an average 4.71% this week, down from 4.77% last week, to well-qualified borrowers who paid 0.8% of the loan amount upfront to the lenders.

For 15-year fixed loans, a popular choice for refinancing, the average offering rate was 4.08% this week with 0.7% paid in lender fees and points, down from 4.13% a week earlier.

Start rates on variable interest loans fell as well, according to Freddie Mac’s survey of lenders.

The rate for the 30-year fixed loan fell as low as 4.17% in the Freddie Mac survey released on Nov. 11, then rose to 4.86% at the end of last year, choking off a refinancing boom.

The survey asks lenders to report popular combination of rates and fees that they are offering to borrowers who have good credit, income enough to handle the mortgage payments, and a 20% down payment or equivalent equity in their homes if they are refinancing.

Solid borrowers who shop around can often find slightly better rates, and of course it’s possible to pay more in upfront points to obtain a lower rate.

The rates in Freddie’s report are for conforming loans, which have a maximum size of $417,000 to $729,750 depending on the area. Larger loans known as jumbos -- the kind that many Californians still must take on to afford homes in the most desirable areas -- have interest rates that typically are at least half a percentage point higher.

RELATED:

Unemployment rate drops to 9.4%, but analysts find little to cheer

-- E. Scott Reckard

Image credit: Freddie Mac