Purchasing power surges as mortgage rates tumble to lowest level in months

Mortgage rates fell for a seventh consecutive week to the lowest level since December, mortgage buyer Freddie Mac said Thursday.

Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage decreased to 6.63% from last week’s reading of 6.76%. The average rate on a 30-year loan was 6.88% a year ago.

The 30-year loan saw the largest weekly decline since mid-September, said Sam Khater, Freddie Mac’s chief economist.

“The decline in rates increases prospective homebuyers’ purchasing power and should provide a strong incentive to make a move,” Khater said. “Additionally, this decline in rates is already providing some existing homeowners the opportunity to refinance. In fact, the refinance share of market mortgage applications released this week reached nearly 44%, the highest since mid-December.”

The average rate on the 15-year fixed mortgage fell to 5.79% from 5.94% last week. One year ago, the rate on the 15-year fixed note averaged 6.22%.