Homebuyers Continue to Benefit From Low Interest Rates

Despite concerns among potential Massachusetts first-time home buyers over the Federal Reserve raising short-term interest rates and how that might eventually affect mortgage interest rates, 30-year, fixed-rate interest rates for home loans have declined and remain low.

U.S. mortgage interest rates for 30-year, fixed-rate mortgages declined for the second straight week, government-sponsored Freddie Mac reported January 14, 2016 through its Primary Mortgage Market Survey.

The 30-year, fixed-rate mortgage loan averaged 3.92 percent, with an average 0.6 point for the week ending January 14, 2016, down from the previous week when rates averaged 3.97 percent. During the same time frame in 2015, the 30-year, fixed-rate mortgage averaged 3.66 percent.
The 15-year, fixed-rate mortgage averaged 3.19 percent, with an average 0.5 point. The rate decreased from 3.26 percent the previous week. The 15-year, fixed-rate mortgage averaged 2.98 percent during the same period last year.
The 5-year, Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.01 percent for the week ending January 14, 2016, with an average 0.4 point. The 5-year ARM averaged 3.09 percent the previous week and 2.90 percent a year ago.

"Long-term Treasury yields continue to drop, dragging mortgage rates down with them," Sean Becketti, Freddie Mac chief economist said. "Turbulence in overseas financial markets is generating a flight-to-quality which benefits U.S. Treasury securities. In addition, sagging oil prices are capping inflation expectations. The net effect on the 30-year mortgage rate was a five basis point drop to 3.92 percent."

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets.

Massachusetts Home Buyer Guide