Home buyers start 2020 with drop in mortgage rates

Open homes held across the country as average 30-year fixed rate drops to 3.69%.

Jan.January 07, 2020 05:00 PM
Buyer sentiment was strong at the close of 2019 (Credit: iStock)

Buyer sentiment was strong at the close of 2019 (Credit: iStock)

The housing market is launching into 2020 with a flurry of activity as mortgage rates fell last week to the lowest level since October.

According to CNBC, there were a string of open homes held across the country this January— a rare occurrence for the time of year — as the average 30-year fixed mortgage rate dropped to 3.69 percent.

Buyer sentiment was strong at the close of 2019, according to the Home Purchase Sentiment Index, a monthly survey produced by Fannie Mae. Respondents expressed confidence in their incomes and employment, and said they didn’t anticipate mortgage rates to increase.

“The continued strength in the HPSI attests to the intention among consumers to purchase homes,” Doug Duncan, senior vice president and chief economist at Fannie Mae, told CNBC.

“The HPSI hit and remained near an all-time high in 2019, driven by the 16-percentage point year-over-year increase in the share of consumers believing it is a good time to buy.”

Demand for housing was also high, and national prices increased 3.7 percent annually in November, according to CoreLogic.

Frank Nothaft, chief economist at CoreLogic, said the figures showed that the slow sales seen early last year had rallied.

“The decline in mortgage rates, down more than one percentage point for fixed-rate loans from November 2018, has supported a rise in sales activity and home prices,” he said. [CNBC] — Sylvia Varnham O’Regan

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