After two weeks of increases, mortgage rates dropped this week amid a flurry of activity by the Federal Reserve and the federal government.
Freddie Mac said 30-year fixed mortgage rates averaged 3.5 percent – down from 3.65 percent last week and 4.06 percent a year ago. Fifteen-year fixed rates dropped to 2.92 percent from 3.06 percent and 5-year adjustable rate mortgages were up 0.23 points to 3.34 percent.
“The Federal Reserve’s swift and significant efforts to stabilize the market were much needed and helped mortgage rates drop for the first time in three weeks,” Freddie Mac said in a statement. “Similar to other segments of the economy, real estate demand is softening. However, the combination of the Fed’s actions and pending economic stimulus will provide substantial support to the mortgage markets.”
The Federal Reserve on Monday announced it would spend more on mortgage-backed securities in the coming weeks. The Fed’s Federal Open Market Committee will purchase Treasury securities and mortgage-backed securities “in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”
Also Monday, the Fed announced plans to support the flow credit to employers, consumers, businesses, and cities and towns.
Additionally, the House is expected to give final passage Friday to a $2 trillion COVID-19 relief package that includes significant relief for homeowners and leaders.