Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), showing that the 30-year fixed-rate mortgage (FRM) averaged 3.21 percent.
“The rebound in homebuyer demand continued this week, driven by mortgage rates that hover near record lows,” said Sam Khater, Freddie Mac’s chief economist. “This turnaround in demand, particularly by those who have higher incomes than the typical household, also reflects deferred sales from the spring.”
Here’s the breakdown:
30-year fixed-rate mortgage averaged 3.21 percent with an average 0.9 point for the week ending June 11, 2020, up slightly from the previous week’s 3.18 percent. This time last year, the 30-year FRM averaged 3.82 percent.
15-year fixed-rate mortgage averaged 2.62 percent with an average 0.8 point, unchanged from last week. This time last year, the 15-year FRM averaged 3.26 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.10 percent with an average 0.4 point, unchanged from last week. This time last year, the 5-year ARM averaged 3.51 percent.
According to Fannie Mae’s Q2 2020 Mortgage Lender Sentiment Survey®, mortgage lenders’ profit margin outlook for the next three months fell slightly but remained positive due to strong reported refinance demand.
This quarter, 52 percent of lenders believe profit margins will increase compared to the prior quarter, while 24 percent believe profits will remain the same and 23 percent believe profits will decrease.
“This quarter’s results reflect the impact of COVID-19 on all fronts,” said Fannie Mae Senior Vice President and Chief Economist Doug Duncan. “Lenders’ reported purchase mortgage demand for the prior three months and expectations for the next three months declined significantly from last quarter across all loan types. Demand for non-GSE eligible loans showed a sharper drop, reaching the lowest reading since survey inception, indicating a shift toward the GSE-eligible lending market. Lenders attributed the purchase mortgage demand decline to COVID-19-related factors, including home price uncertainty, higher unemployment, policy changes and lower inventory. Lenders pointed to the same reasons for credit tightening.”
“There are, however, encouraging signs,” continued Duncan. “For the agency lending market, the purchase demand outlook remains positive on net and is well above the Q4 2018 reading, a period of accelerated declines. If borrowers perceive the bottom of the economic downturn as having passed, there could be a pickup in purchase demand to take advantage of continued low mortgage rates. Additionally, this quarter, refinance demand expectations held relatively stable, demonstrating continued strength. Lenders’ profitability outlook remains positive, likely because of stable refinance demand, lender capacity constraints, and still-wide mortgage spreads. Nevertheless, challenges remain as the uncertainty around COVID-19 persists, in particular for mortgage servicing.”
Source: Freddie Mac and Fannie Mae
