Freddie Mac: Mortgage rates level off, 30-year loan averages 4.23%

Home building

Home building in Rancho Santa Fe, Calif., above. Mortgage rates leveled off this week amid the government shutdown, with Freddie Mac saying the 30-year fixed loan averaged 4.23%. (Sam Hodgson / Bloomberg)


By E. Scott Reckard

Mortgage interest rates have leveled off at their lowest levels since June, with 30-year fixed-rate loans averaging 4.23%, statistically unchanged from 4.22% last week, according to Freddie Mac’s weekly survey.

The home finance giant’s widely watched poll of what lenders are offering to solid borrowers showed the average rate for a 15-year fixed mortgage rising from 3.29% to 3.31%, also small enough to make no statistical difference.

Freddie Mac pegged the 30-year average at 3.35% in early May. It shot up to 4.58% in August on widespread belief the Federal Reserve would taper off its efforts to keep interest rates low, then fell again when the Fed decided in September that the economy wasn’t strong enough for it to do so. 

Borrowers would have paid lenders an average of 0.7% of the loan amount in fees and discount points to obtain the rate, according to the latest report, issued Thursday morning. Appraisal costs and other third-party charges that borrowers often pay are not figured into the survey. 

Automated loan-processing systems at Freddie Mac, Fannie Mae and the Federal Housing Administration were functioning despite the government shutdown, according to the Mortgage Bankers Assn. and other experts.

That allowed near-normal home lending to continue, with the exception of rural development loans guaranteed by the U.S. Department of Agriculture, where the loan-processing system is shut down.

Laguna Niguel mortgage broker Jeff Lazerson, who supplies borrowers with home loans from 10 lenders, said early this week that “not one loan has been held up yet” as a result of the federal furloughs.


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