The US housing market is showing further signs of recovery; as fixed-rate mortgages dropped to historic lows for the second consecutive week, according to mortgage giant Freddie Mac.
The average rate of 30-year fixed loans fell from 3.34 percent last week to 3.31 percent – the lowest since 1971. At the same time, the average on 15-year fixed mortgages slipped to 2.63 percent from 2.65 percent. It averaged 3.30 percent a year ago.
“Fixed mortgage rates continued to ease somewhat this week to record lows and should help the ongoing housing recovery," said Frank Nothaft, Vice President and Chief Economist at Freddie Mac.
Construction of new homes also increased in October while sales of existing houses rose by 2.1 percent, exceeding forecasts.
Additionally, home-builder confidence rose for six months in a row, reaching its highest reading since June 2006, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
Lower mortgage rates have encouraged more consumers to refinance, which usually results in lower monthly instalments and higher consumer spending, which drives about 70 percent of the country’s economic activity.
Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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