Homebuyers taking advantage of historically low interest rates provided a boost to the housing market as the number of contracts to buy shot up in May.
Pending home sales increased 44% in May, according to data released by the National Association of Realtors on Monday. The increase represents the largest month-over-month gain since NAR started measuring the stat in 2001. Market watchers like this figure because it provides an early look at changes in sales activity.
“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership,” said NAR chief economist Lawrence Yun in a press release.
The sharp upswing from April shows that month may have been a low-point in the sales slowdown caused by the coronavirus, but May signings were still down 5% from a year earlier. Nevertheless, Yun noted that the outlook for real estate has improved over the past month, with new home sales volume expected to surpass 2019 numbers and the sale of existing homes to be less than 10% below last year’s level.
The Mortgage Bankers Association offered another sign of recovery Monday, reporting that the total number of loans in forbearance dropped for the second week to 4.2 million. That’s a decline of one basis point to 8.47% of all mortgages. “The rebound in the housing market is likely one of the factors that is providing confidence to both potential homebuyers and existing homeowners during these troubled times,” said Mike Fratantoni, senior vice president and chief economist for the MBA.
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Average Mortgage Rates Today
For the week ending June 25, the average interest rate for a 30-year fixed-rate mortgage remained at an all-time low of 3.13% with 0.8 points paid, according to Freddie Mac. That’s 0.02 percentage points below the previous low of 3.15% set in May.
The average rate for a 15-year fixed-rate mortgage was 2.59% with 0.8 points paid, up 0.01 percentage points from the previous week, while the average rate on a 5-year adjustable-rate mortgage decreased slightly to 3.08% with 0.5 points paid.
Average Refinance Rates Today
A year ago the average mortgage rate was 3.73%. A homeowner with a $250,000 mortgage balance paying 3.73% on a 30-year loan could cut their monthly payment from $1,155 to $1,071 by financing at today’s lower rates. (It is important to consider closing fees and that refinancing could reset the clock on your mortgage, meaning you will have to make payments longer.)
Today’s Mortgage Rates
Of course, mortgage rates vary widely by location and personal factors like location, the size of your down payment and your credit score. Here are today’s advertised mortgage rates at some of the mortgage industry’s largest lenders. (The rates you see may be different.)
Quicken, a non-bank lender based in Detroit, is the nation’s largest mortgage lender by dollar origination volume.
Mortgage rates advertised for June 30:
30-year fixed: 3.394%
(Quicken doesn’t advertise a five-year adjustable rate. Rates are APRs.)