Residential Mortgage Rates Hit All-Time Record Lows

Freddie Mac’s weekly Primary Mortgage Market Survey (PMMS) hit an all-time record low for 30-year, conventional, fixed-rate residential mortgage loans, sinking to 3.07 percent for the week of July 3^rd, 2020, down from 3.75 percent one-year ago. That would have reduced the month principal and interest payment on a $200,000 loan from $926.24 (3.75 percent) to $850.78 (3.07 percent) – an 8.2 percent savings. Over the 30-year potential life of the loan, the $75.47 monthly savings would have save the borrower $27, 169.

Freddie Mac commenced the PMMS in April 1971. They currently sample a mix of thrifts, credit unions, commercial banks, and mortgage companies each week, proportional to originator market share. The survey is collected Monday through Wednesday with the results released on Thursday at 10 a.m. ET. Surveyed are interest rates and points for the most popular first-lien 30-year fixed rate, 15-year fixed rate and 5/1 hybrid amortizing adjustable rate, fully-amortizing loans based on an 80 percent loan-to-value ratio.

Weekly 30-year rates from the PMMS are shown in the table below.

The next table summarizes mortgage rates and points for 30-Year Fixed-Rate, 15-Year Fixed-Rate and 5-Year Fixed-Rate Hybrid loans comparing the latest data to the prior week and one-year ago.

The last graph shows weekly 30-year mortgage rate since 1972 along with occurrences of recessions. Rates peaked at 18.63 percent as reported on October 9, 1981. At that interest rate level, the monthly principal and interest payment on the $200,000 30-year loan would have been $3,117.17 vs $850.78 at the current 3.07 percent.

To examine the historical data series from Freddie Mac click http://www.freddiemac.com/pmms/

There is potential for 30-year mortgage rates to sink into the upper 2 percent range – good news for prospective homebuyers and for current borrowers to refinance their residential mortgage loans.

Ted