Low home loan rates

They did it again. Mortgage rates dipped for the sixth week in a row — just above the 2015 low of 3.59% — thanks to a still-volatile stock market. Meanwhile, a lack of housing inventory is putting the squeeze on potential homeowners who risk being sidelined by increasing home prices and too few homes to choose from.

Freddie Mac’s just-released weekly survey of lenders shows the following average rates for the most popular home loan terms:

• 30-year fixed-rate mortgages averaged 3.65% with an average 0.5 point for the week ending Feb. 11, 2016. A year ago, the rate averaged 3.69%.
• 15-year fixed rates averaged 2.95% with an average 0.5 point. The same term priced at 2.99% a year ago.
• 5-year adjustable-rate mortgages priced at 2.83% with an average 0.4 point. Last year at this time, the same ARM averaged 2.97%.

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In a falling rate environment, mortgage rates often adjust more slowly than capital market rates, and the early 2016 flight-to-quality has run true to form, ” Sean Becketti, chief economist for Freddie Mac, said in a release. “The 30-year mortgage rate has dropped 36 basis points since the start of the year, while the yield on the 10-year Treasury has dropped 59 basis points over the same period. If Treasury yields were to hold at current levels, mortgage rates might well sink a little further before stabilizing.”

Mortgage applications rose 9.3% for the week ending Feb. 5 from the week prior, according to the Mortgage Bankers Association weekly report.

Purchase applications were up 0.2%, as refi applications soared by 16%. Overall, home purchase loan applications remain 25% higher than the same week one year ago.

Low inventory creating bottleneck for potential buyers

Hopeful homebuyers are becoming increasingly sidelined by a lack of available homes on the market, and it’s a problem that’s here to stay, according to a new report from the National Association of Realtors.

Fewer homes on the market pushed the median existing single-family home price up in 81% of measured markets, with 145 out of 179 metro housing markets showing increases based on fourth-quarter closings, the association reported.

That means housing options are shrinking, which is sidelining a lot of potential buyers, said Lawrence Yun, NAR chief economist, in a release.