Mortgage Rates Decline for the First Time Since the Beginning of 2018

Primary Mortgage Market Survey.US Weekly Average Mortgage Rates During Period March 15, 2017-March 15, 2018
Primary Mortgage Market Survey.    US Weekly Average Mortgage Rates During Period March 15, 2017-March 15, 2018


I wrote a blog post two weeks ago that mortgages rates were going up every week in 2018. As of March 1st, 30-year fixed mortgage rate reached 4.43 percent.

The survey for the week of March 8th, 2018 said that fixed mortgage rate went up again to 4.46 percent.

Primary Mortgage Market Survey of week of March 15th, 2018 announced that U.S. weekly average 30-year fixed-rate mortgage dropped 2 basis points to 4.44 percent in this week’s survey, its first decrease this year.

So, for nine straight weeks of this year average mortgage rate went up to 4.46 percent. When finally for the week of March 15th,2018 survey rate dropped to the rate of 4.44 percent.

I really would like to see what this week survey will say.


Mortgage Applications Increase

Mortgage Applications 3_6_2018
Mortgages applications increase for the week of January 19th,2018

Mortgage Bankers Association ( MBA) conducts Weekly Mortgage Application Survey.

For the week ending January 19th, 2018, mortgage applications increased 4.5 percent from one week earlier.  This week application numbers was adjusted for MLK Day holiday.

According to this article, “the Market Composite Index, a measure of mortgage loan application volume, increased 4.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week.”

The mortgage application survey includes 75% of all USA residential mortgage applications. Mortgage bankers, commecial banks and thrifts answer to survey.


Mortgage Rates Increase for Eighth Straight Week

Freddie Mac. Primary Mortgage Market Survey
Freddie Mac. Primary Mortgage Market Survey. U.S. weekly average mortgage rates for the period March 1, 2017 – March 1, 2018


According to Freddie Mac’s Primary Mortgage Market Survey , fixed-rate mortgage rates increase for eighth (8) straight week. As of March 1st, 30-year fixed mortgage rate reached 4.43 percent in this weeks survey. This went up from 4.3 percent last week. In the beginning of January mortgage rate was 3.95 percent. And since then, fixed-rate increased every week.

Exactly 1 year ago mortgage rate was 4.1 percent. The lowest rate last year was during two weeks in September 7th to 14th, when it was 3.78 percent. The highest mortgage rate during the previous year was for the week of March 16th, when rate reached 4.3 percent. But this weeks mortgage rate went even above that to 4.43 percent.

If you would like to know simple explanation about Freddie Mac that I wrote about, you can read about it here.

What is Freddie Mac Loan?

IMG_3605 - What is Freddie Mac loan. 2017_02_04

Freddie Mac is nickname for Federal Home Loan Mortgage Corporation (or FHLMC). This is a government sponsored enterprise.

Freddie Mac buys mortgages from banks, credit unions and other lenders, combines and packages them together into similar type mortgage-backed securities, then sell the shares of these mortgages to investors.

Without the Freddie Mac, lenders would have to keep loans on their books till they are paid of. But then banks would not have enough money to make new loans for new borrowers. Lenders use the money received from Freddie Mac to make new mortgages to home-buyers.

Then Freddie Mac resells the mortgage backed securities to investors on the secondary market. The shares of the packaged securities are bought by pension funds, insurance companies and mutual funds. Lenders get the money and can make new loans for new borrowers. That starts this process all over again.



What is Fannie Mae Loan?

IMG_3653 - What is Fannie Mae Loan

Fannie Mae is the nickname used for Federal National Mortgage Association (or FNMA). It was established in 1938 by Congress during the Great Depression. This made more mortgages available to moderate and low income borrowers. It started to activate the real estate market.

Fannie Mae does not make and produce mortgages to borrowers. Fannie Mae buys mortgages from banks and other lenders. It combines loans together and changes them into mortgage-backed securities. Then it sells those securities to investors. This is how lenders can free up the money, so they can create more loans. This way mortgages can easily be bought and sold. Lenders have enough money to work with more borrowers.

To qualify for a Fannie Mae home loan, buyer has to look for an approved lender and complete an application for a loan. Lender looks at various factors and has strict criteria. Fannie Mae lets first time home buyer to get a loan with 3% down. Mannie Mae looks at the credit score too- the minimum has to be 620. By having a higher credit score, the buyer can get lower interest rates. A minimum credit score is 620 is needed to get a loan with a fixed interest rate. A minimum score of 640 is needed to qualify for an adjustable-rate loan.