After taking their biggest plunge in more than a decade, mortgage rates are little changed this week. And that pause is giving borrowers -- who have been stampeding to lenders' websites and offices -- more time to grab hold of a lower rate.
The average rate on a 30-year fixed-rate mortgage has ticked up to 4.08%, from last week's 4.06%, reports mortgage giant Freddie Mac.
One year ago, the benchmark mortgage rate was higher: averaging 4.40%. The loans in Freddie Mac's survey come with an average 0.5 point.
The lower rates have touched off a borrowing blitz. Mortgage applications surged 18.6% last week, the Mortgage Bankers Association says, and refinance applications skyrocketed 39% to the highest level since November 2016.
Why rates are doing what they're doing
If you've been thinking of putting your house on the market, you're in luck. Attractive mortgage rates will give way to strong homes sales, says Sam Khater, Freddie Mac’s chief economist.
“While the housing market has faced many headwinds the last few months, it sailed through the turbulence to calmer seas with demand buttressed by a strong labor market and low mortgage rates," Khater says.
Last week, mortgage rates took their biggest one-week plunge in over 10 years after the Federal Reserve indicated it was not likely to raise interest rates again this year because of signs the growth in the economy is slowing.
Freddie Mac is forecasting an average 30-year mortgage rate this year of 4.5%, which is higher than the current levels. So, you may not want to wait too long to take advantage of the drop in rates.
Could this be your year to buy a home? Calculate what your monthly mortgage payment will be.
This week's other mortgage rates
Rates on 15-year mortgages are averaging 3.56% this week, down ever so slightly from last week's 3.57%, Freddie Mac says. A year ago, those shorter-term home loans were averaging 3.87%.
And 5/1 adjustable-rate mortgages — with rates that hold steady for five years and then can "adjust" up (or down) every year thereafter — are now being offered with initial rates averaging 3.66%. That's down from 3.75% last week.
At this time in 2018, those ARMs were offered at an average initial rate of 3.62%.
Before you apply for a mortgage, you'll need to pull together a down payment. Find a good savings account to help you put that money aside.