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MCLEAN, Va. - Mortgage rates declined for the second consecutive week, with the 30-year fixed-rate mortgage averaging 6.26% as of Thursday, down from 6.35% last week, according to Freddie Mac’s (OTCQB:FMCC) Primary Mortgage Market Survey. The company, a prominent player in the Financial Services industry with a market capitalization of $41.94 billion, has seen its stock surge over 310% year-to-date, according to InvestingPro data.
The decrease has triggered a surge in refinancing activity, with refinance applications accounting for nearly 60% of all mortgage applications, reaching the highest level since January 2022. With annual revenues of nearly $23 billion and a GOOD Financial Health Score from InvestingPro, Freddie Mac maintains a strong position to handle this increased market activity. InvestingPro subscribers can access 13 additional key insights about FMCC’s performance and outlook.
"Mortgage rates decreased yet again this week, prompting many homeowners to refinance," said Sam Khater, Freddie Mac’s Chief Economist, in a press release statement.
The 15-year fixed-rate mortgage also declined, averaging 5.41%, down from 5.50% last week. Both rates remain above their levels from a year ago, when the 30-year and 15-year fixed-rate mortgages averaged 6.09% and 5.15%, respectively.
This marks a notable shift in the mortgage market, as rates had been trending higher for much of the year. The recent decline provides an opportunity for homeowners who purchased properties at higher rates to potentially lower their monthly payments.
The survey focuses on conventional, conforming home purchase loans for borrowers with 20% down payments and excellent credit.
Freddie Mac, a government-sponsored enterprise that promotes liquidity and stability in the U.S. housing market, releases the mortgage rate survey weekly to track trends in the residential mortgage industry.
In other recent news, Freddie Mac reported that the 30-year fixed-rate mortgage averaged 6.35%, marking the largest weekly drop in the past year with a 15 basis point decrease from the previous week’s 6.50%. This decline in mortgage rates has led to increased refinancing activity, the highest since 2022. Deutsche Bank has initiated coverage on Freddie Mac with a Buy rating and a price target of $25.00, indicating potential upside despite the stock’s significant rally this year. Similarly, Fannie Mae received a Buy rating from Deutsche Bank with a $20 price target. However, Keefe, Bruyette & Woods maintained its Underperform rating on both Fannie Mae and Freddie Mac, citing potential dilution risks for common shareholders if privatization efforts proceed. They noted that the likelihood of such efforts has increased over the past six months. These developments highlight ongoing interest and varying analyst perspectives on these government-sponsored enterprises.
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