Mortgage rates fell more in the past week than they have in any one-week period in more than a decade.
The average 30-year fixed loan has dropped 22 basis points to 4.06%, while 15-year fixed loans are down 14 basis points to 3.57%, according to Freddie Mac.
Going forward, the numbers are likely to go even lower.
Mortgage News Daily is reporting the rate for a 30-year fixed loan is 4.03%, the latest in an increasing number of 52-week lows. That could be the shot in the arm the housing market needs to get out of its current lull.
“Despite negative outlooks by some, the economy continues to churn out jobs, which is great for housing demand,” said Freddie Mac. “We have recently seen home sales start to recover and with this week’s rate drop we expect a continued rise in purchase demand.”
How significant is the drop? Rates are now down almost a full percentage point from the 5.05% they hit last October, which was the highest level for a home loan since February 2011.
The drop is a result of the Federal Reserve’s most recent policy meeting, when officials said the Fed would be “patient” as it monitors data for changes in the economy or inflation pressures. Eleven of the 17 Fed officials helping to set interest-rate policy said they saw no need to raise rates this year. Only two held that opinion in December.