MCLEAN, Va. - Freddie Mac (OTCQB: FMCC (OTC:FMCC)) announced Thursday that the 30-year fixed-rate mortgage (FRM) has maintained a steady average of 6.78 percent. This figure remains largely unchanged from the previous week's average of 6.77 percent, marking a subtle stabilization in the cost of home borrowing.
The report, part of Freddie Mac's Primary Mortgage Market Survey® (PMMS®), also highlighted that the 15-year FRM edged up slightly to an average of 6.07 percent from 6.05 percent last week. Comparatively, a year ago, the 30-year and 15-year FRMs were at 6.81 percent and 6.11 percent, respectively.
Freddie Mac's Chief Economist, Sam Khater, noted that despite a near half-percent drop from earlier highs this year, homebuyers appear to be holding back, as evidenced by the decline in new and existing home sales.
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, plays a significant role in the housing market by promoting liquidity, stability, affordability, and equity.
The organization has been instrumental since 1970 in assisting millions of families in buying, renting, or retaining their homes across various economic cycles.
This week's mortgage rates, which have remained relatively flat, are an essential indicator for potential homebuyers and the housing market's overall health. The data provided in the survey is based on a press release statement from Freddie Mac.
In other recent news, Freddie Mac, the mortgage finance company, has reported a series of events and changes in the housing market. The company's 30-year fixed-rate mortgage has seen fluctuations, dipping below 7% for the first time since early April, averaging at 6.94%.
Still, the rates subsequently increased for five weeks, reaching an average of 7.22%, before stabilizing around 6.82%. Despite signs of decreasing inflation rates, Freddie Mac's Chief Economist, Sam Khater, does not anticipate a significant drop in mortgage rates in the near future.
Furthermore, Freddie Mac announced its plan to voluntarily delist its last security traded on the New York Stock Exchange, attributing the decision to the unnecessary burden of compliance with NYSE rules. This follows the delisting of Freddie Mac's common stock from the NYSE in 2010, directed by its conservator, the Federal Housing Finance Agency.
In the midst of these changes, the housing market has experienced a decline in both existing and new home sales, and a decrease in single-family housing starts and building permits. However, Khater noted an improvement in housing inventory, which could potentially moderate the growth of home prices.
These recent developments, based on data from Freddie Mac's Primary Mortgage Market Survey, are significant to potential homebuyers and the broader economy, influencing consumer spending and the construction industry.
InvestingPro Insights
As Freddie Mac (OTCQB: FMCC) continues to influence the housing market through its pivotal role, recent data from InvestingPro provides insights into the company's financial health and stock performance. With net income expected to grow this year, Freddie Mac stands as a prominent player in the Financial Services industry. This anticipated growth aligns with Freddie Mac's core mission of promoting liquidity and affordability in the housing sector.
InvestingPro Data shows a significant revenue growth of 35.37% for the last twelve months as of Q1 2024, with a gross profit margin maintaining a solid 100%. This financial robustness is critical for Freddie Mac as it seeks to navigate the complex dynamics of the mortgage market. Moreover, the company's liquid assets surpassing short-term obligations is a reassuring sign of financial stability, which is essential for investors monitoring the health of such a key industry player.
Despite a negative P/E Ratio of -270.37, analysts on InvestingPro predict the company will be profitable this year, which could signal a turning point for Freddie Mac's financial trajectory. Moreover, the stock has seen a high return over the last year, with a 195.38% increase in the 1 Year Price Total Return as of mid-2024. This volatility in stock price movements, noted as one of the InvestingPro Tips, may present opportunities for investors with an appetite for the higher risk associated with such fluctuations.
For those considering an investment in Freddie Mac or seeking a deeper understanding of its market potential, there are additional InvestingPro Tips available. These tips provide valuable insights into the company's performance and prospects. To access these, and potentially benefit from the insights, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. Discover more about Freddie Mac's financial and market standing by visiting https://www.investing.com/pro/FMCC.
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