WASHINGTON – Long-term mortgage rates rose slightly this week, continuing to hover near all-time lows amid anxiety over the economy and housing market gut-punched by the shutdown spurred by the coronavirus pandemic.
Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year home loan edged up to 3.33% this week from 3.31% last week. A year ago the rate stood at 4.20%.
The average rate on the 15-year fixed-rate mortgage rose to 2.86% from 2.80% last week.
Demand from prospective homebuyers has weakened amid economic anxiety, and the housing market has been upended by the pandemic just as it was entering the busy spring season. Mortgage rates have stabilized in the last few weeks as the market searches for direction and clues in the latest economic data, Freddie Mac noted.
The federal agency that oversees Freddie Mac and larger mortgage buyer Fannie Mae announced Wednesday that the two companies will buy qualified home loans in forbearance to keep lending flowing. Fannie and Freddie, which are under government control, together back about half the home mortgages in the $11 trillion U.S. market. They put the mortgage relief programs in effect several weeks ago to help homeowners hit by the economic shutdown, giving borrowers relief on payments for up to one year and suspending late charges and penalties.
Meanwhile, the government reported Thursday that new home sales in the U.S. tumbled 15.4% last month as the economic contraction began to rattle the housing market. The drop was expected, though economists say it will grow much worse as the country struggles with the shutdown that brought job losses for some 26 million Americans in the past five weeks, as another government report showed Thursday.