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U.S. mortgage rates continue to decline

EditorNatashya Angelica
Published 06/20/2024, 12:28 PM

MCLEAN, Va. - Freddie Mac reported on Thursday that the 30-year fixed-rate mortgage (FRM) has dropped for the third consecutive week, now averaging 6.87 percent. This decline comes amid indicators of easing inflation and the anticipation of a potential Federal Reserve rate cut.

The latest figures from Freddie Mac's Primary Mortgage Market Survey® (PMMS®) show a slight decrease from the previous week's average of 6.95 percent. Compared to the same period last year, when the 30-year FRM stood at 6.67 percent, the current rate represents a slight uptick.

The survey also revealed that the 15-year fixed-rate mortgage averaged 6.13 percent, which is a small drop from last week's average of 6.17 percent. This time last year, the 15-year FRM averaged 6.03 percent.

Freddie Mac's Chief Economist, Sam Khater, noted the positive implications of the falling rates for the housing market, stating that they, along with a gradually improving housing supply, are favorable for homebuyers. Khater also emphasized the importance for prospective homeowners to shop around for the best mortgage rates.

The PMMS® focuses on conventional, conforming, fully amortizing home purchase loans for borrowers who place a 20 percent down payment and possess excellent credit.

Freddie Mac, a public government-sponsored enterprise, is committed to promoting liquidity, stability, affordability, and equity in the housing market. The organization has been a cornerstone of the housing market since 1970, assisting millions of families in buying, renting, or maintaining their homes.

The information in this report is based on a press release statement from Freddie Mac.

In other recent news, Freddie Mac, the mortgage finance company, has announced a series of major developments. The company has decided to voluntarily delist its last security traded on the New York Stock Exchange, citing the unnecessary burden of compliance with NYSE rules and administration given its current status under government conservatorship. This follows the delisting of Freddie Mac's common stock from the NYSE in 2010.

On the mortgage front, Freddie Mac reported fluctuations in the 30-year fixed-rate mortgage rates. Rates dipped under 7% for the first time since early April, averaging at 6.94%, only to rise for five consecutive weeks, reaching an average of 7.22%. Later, the rates showed stability around 6.82%, with another decrease bringing the rate down to an average of 6.79%.

These rate changes have been attributed to data indicating a slowdown in economic growth by Freddie Mac's Chief Economist, Sam Khater. Despite signs of decreasing inflation rates, Khater does not anticipate a significant drop in mortgage rates in the near future.

Still, he notes an improvement in housing inventory, which could potentially moderate the growth of home prices. These developments are based on data from Freddie Mac's Primary Mortgage Market Survey, which tracks conventional, conforming home purchase loans for borrowers who place a 20 percent down payment and possess excellent credit.

InvestingPro Insights

As Freddie Mac continues to play a significant role in the housing market, recent data from InvestingPro provides insights into the financial health and market performance of the company. With a market capitalization of $3.9 billion, Freddie Mac is a substantial player in the financial services industry. The company's stock has experienced high volatility, which is an important consideration for investors interested in the sector.

Here are some key metrics from InvestingPro that may be of interest to investors following Freddie Mac's market activity:

  • The Price/Earnings (P/E) ratio stands at a negative -45.91, reflecting challenges in profitability over the last twelve months as of Q1 2024. However, analysts predict the company will turn profitable this year, which could be a positive sign for investors.
  • Revenue growth has been strong, with a 35.37% increase over the last twelve months as of Q1 2024, and a quarterly revenue growth of 25.81% in Q1 2024.
  • Despite recent price declines, with a 20.51% drop over the last month, the company has seen a significant 181.88% return over the past year, indicating a large price uptick over a longer time frame.

InvestingPro Tips for Freddie Mac highlight that the company is expected to see net income growth this year and remains a prominent player in its industry. Moreover, while the stock has fared poorly over the last month, its high return over the last year and the fact that its liquid assets exceed short-term obligations may be of interest to potential investors.

For those looking to delve deeper into Freddie Mac's financials and stock performance, there are additional InvestingPro Tips available. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to a more comprehensive analysis and insights.

Keep in mind, the volatility in Freddie Mac's stock price and the anticipation of profitability this year could present opportunities for investors, especially those who are well-informed and can navigate the fluctuations in the financial services industry.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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