WASHINGTON–Mortgage rates have been declining again, with some lenders–including one credit union–now advertising rates below 4%.
The average rate on a 30-year fixed mortgage fell to 4.06% last week, its lowest since January 2018, according to data released Thursday by Freddie Mac. That’s down nearly a quarter-point from one week earlier and marked the biggest drop in more than a decade.
According to Bankrate.com, among the lenders with mortgage rates below 4% last week were Toronto Dominion Bank, HSBC, and Teachers Federal Credit Union in New York, which was offering a 10/1 ARM jumbo mortgage with a rate of 3.75% (4.47% APR).
The rate decline comes just about a month after mortgage rates approached 5% and forecasts were calling for a flattening in the housing market. But rates peaked and began declining after the Fed indicated it would not be raising rates in 2019, as had been expected. Now, some are forecasting the lower rates will put new life into the housing market as Spring approaches, according to the Wall Street Journal.
Michael Menatian, president of, Sanborn Mortgage Corp. in West Hartford, Conn., which offers a sub-4% rate, told the Journal, “People love it when they have a rate like that. Psychologically, it has a huge impact.”
Jump in Mortgage Apps
With the decline in mortgage rates came a jump in mortgage applications of 8.9% last week, according to the most recent survey by the Mortgage Bankers Association.
“It’s such a big move in rates, it’s prompting more potential home buyers to step back into the market,” said Joel Kan, the associate vice president of economics and industry forecasting at MBA, in a statement.
Lower rates also are boosting refinancing applications, which jumped 12% over that span. As of last week, 3.3 million homeowners stood to save money by refinancing their mortgages, the most since January 2018, according to Black Knight Inc., a mortgage-data and technology firm, the Journal reported.