Freddie Mac (OTCQB: FMCC (OTC:FMCC)), a major player in the U.S. housing market, said on Thursday that the 30-year fixed-rate mortgage (FRM) has decreased to an average of 6.73 percent, marking the lowest point since early February.
The decline from last week's average of 6.78 percent is accompanied by a decrease in the 15-year FRM, which now averages 5.99 percent, down from 6.07 percent.
The results, derived from Freddie Mac's Primary Mortgage Market Survey® (PMMS®), also highlighted a comparison to the previous year's rates, with the 30-year FRM averaging 6.90 percent and the 15-year FRM at 6.25 percent at that time.
An economist from Freddie Mac attributed the current reduction in mortgage rates to market anticipation of a Federal Reserve rate cut and signs of easing inflation. However, they noted that despite these positive indicators, consumer confidence remains tentative, and affordability issues continue to be a significant concern for homebuyers.
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, established in 1970, has been a cornerstone in the U.S. housing finance system, promoting liquidity, stability, affordability, and equity across various economic cycles.
The U.S. 30-year fixed-rate mortgage has seen a decrease, falling below 7% for the first time since early April, according to recent data. This dip in mortgage rates could potentially stimulate demand in the housing market by making borrowing costs slightly less expensive for potential homebuyers.
InvestingPro Insights
As Freddie Mac (OTCQB: FMCC) continues to play a significant role in the U.S. housing market, recent developments in its financial metrics and market performance provide a broader context for understanding the company's current position. According to InvestingPro data, Freddie Mac boasts a substantial market capitalization of $3.7 billion, reflecting its prominence in the financial services industry. Additionally, the company's revenue growth over the last twelve months as of Q1 2024 stands at an impressive 35.37%, indicating a robust increase in its business activities during this period.
Despite a negative P/E ratio of -156.67, which suggests challenges in profitability, analysts predict a turnaround with net income expected to grow this year. This optimistic outlook is further supported by a PEG ratio of 0.29, hinting at potential undervaluation relative to earnings growth expectations. Moreover, Freddie Mac's liquid assets surpass its short-term obligations, pointing to a solid liquidity position that can support its operations and strategic initiatives.
InvestingPro Tips for Freddie Mac highlight the company's status as a prominent player in the financial services industry and note its stock price movements as quite volatile. This volatility is evidenced by a one-year price total return of 153.14%, showcasing significant returns for investors over the past year. In the context of the article, these insights underscore the company's impact on the housing market and its financial health, which may influence mortgage rates and the broader economy.
For readers interested in a deeper analysis, there are additional InvestingPro Tips available, which can be found by visiting the dedicated page for Freddie Mac at https://www.investing.com/pro/FMCC. These tips provide further insight into the company's financial outlook and market performance, offering valuable information for potential investors and stakeholders.
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