As a result of the federal government shutdown and declining consumer confidence, fixed mortgage rates fell for the third consecutive week, Freddie Mac reports, ending at their lowest averages in nearly four months.
Retreating interest rates are generally good news for home buyers, however, the University of Michigan reports that overall consumer sentiment is at its lowest since April.
Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 3:Â
The shutdown is having some impact on federal housing and mortgage programs. The Federal Housing Administration's Office of Single Family Housing is endorsing new loans, however, the IRS is closed and has suspended the processing of all forms, including requests for tax return transcripts. Lenders often require such documentation from mortgage applicants, but some are adopting revised policies during the shutdown that will allow for processing and closings with income verification to follow. Fannie Mae and Freddie Mac have also adopted relaxed provisions on loans requiring a Form 4506T, allowing closings that are subject to tax transcript verification before the GSEs purchase the loans.
A recent Bloomberg survey of professional forecasters suggests that a partial federal shutdown lasting one week would shave 0.1 percentage points off of GDP growth in the fourth quarter and even more if the shutdown lasts longer. IHS Inc. estimates that the shutdown is costing the U.S. roughly $300 million per day in lost output.
It's a great time to lock in on a rate.Â Let's get moving!
Source: NAR, Freddie Mac