Mortgage rates drop a notch; 30-year averaging 4.2%

Rachel Ezra Manhattan Beach Real EstateMortgage interest rates eased slightly this week amid mixed housing data, with Freddie Mac’s survey showing that lenders were offering 30-year fixed-rate loans to well-qualified borrowers at an average of 4.2%, down from 4.23% last week.

The average rate for 15-year fixed-rate home loans edged down from 3.37% to 3.36%, while the start rates for adjustable loans with the first five years fixed rose to 3.08% from 3.06%.

Frank Nothaft, Freddie Mac’s chief economist, took note of the mixed picture in the housing markets in announcing the survey results Thursday morning.

While sales of new single-family homes surged 18% in August, sales of previously owned homes dropped by about 2%.

Meantime, the Federal Housing Finance Agency, which oversees Freddie Mac and Fannie Mae, reported that house prices rose just 0.1% on a seasonally adjusted basis in July, and were up 4.4% over a year earlier.

Freddie Mac, which buys home loans from lenders and guarantees payments to investors in securities backed by the mortgages, has been a ward of the federal government since the financial crisis.

It asks lenders each week about the terms they are offering to low-risk borrowers on mortgages up to $417,000.

The borrowers in this week’s survey would have paid 0.5% of the loan amount in upfront lender fees and discount points. Many borrowers pay additional points to lower their rates.

Third-party expenses usually paid by the borrower, such as for appraisals and title insurance, are not included in Freddie Mac’s weekly snapshot.

Original Article By E. Scott Reckard @ L.A. Times