Mortgage Rates Fall Again, Hit Lowest Level of the Year: Freddie Mac
Orginal Post Date: May 13, 2010
By Brittany Dunn
Mortgage rates continued to inch down for the week ending May 13, 2010, hitting the lowest level seen so far this year, Freddie Mac reported Thursday.
According to Freddie Mac’s Primary Mortgage Market Survey, 30-year fixed-rate mortgages averaged 4.93 percent with an average 0.7 point this week, down from last week’s average of 5 percent but still higher than a year ago at this time when rates averaged 4.86 percent. Freddie Mac said 30-year fixed-rate mortgages have not been this low since the week ending December 10, 2009, when rates averaged 4.81 percent.
Freddie Mac also reported a decline in 15-year fixed-rate mortgages, which averaged 4.3 percent with an average 0.6 point this week. Rates fell from 4.36 percent last week and were notably lower than this same week last year when 15-year fixed-rate mortgages averaged 4.52 percent. According to Freddie Mac, the last time rates were this low was the week ending December 3, 2009, when 15-year fixed-rate mortgages averaged 4.27 percent.
The story was the same for adjustable-rate mortgages (ARMs). This week, 5-year Treasury-indexed hybrid ARMs averaged 3.95 percent with an average 0.6 point, down from last week’s average of 3.97 percent. Freddie Mac said
this is the lowest rate recorded since it began tracking 5-year ARMs in January 2005.
In addition, 1-year Treasury-indexed ARMs averaged 4.02 percent with an averaged 0.6 point this week, falling from 4.07 percent last week. According to Freddie Mac, 1-year ARMs have not been this low since the week ending November 4, 2004, when rates averaged 4 percent.
A separate report released by Bankrate showed the same trend of declining rates. The tracking company said the week-to-week drop was due to worries over European debt which rattled financial markets and caused rates to fall.
“Once again mortgage shoppers were direct beneficiaries as nervous investors equate to lower mortgage rates,” Bankrate said in its report. “Furthermore, this cloud of global economic uncertainty likely gives the Federal Reserve even more latitude to hold the line on interest rates, so mortgage rates will stay a little lower, a little longer, than what was forecast just a few weeks ago.”
According to Bankrate’s weekly national survey, 30-year fixed rates mortgaged averaged 5.07 percent with an average 0.42 point, down from 5.12 percent last week. In addition, Bankrate said 15-year fixed-rate mortgages stepped down to 4.45 percent with an average 0.39 point, falling from last week’s average of 4.49 percent.
The tracking company also reported a decline in ARMs. According to its survey, the average rate for 3-year ARMs dropped to 4.44 percent from 4.52 percent, and 5-year ARMs sank to 4.27 percent from 4.31 percent.
Complementing Bankrate’s survey is its weekly Rate Trend Index, in which mortgage experts predict which way rates are headed over the next week. Nearly two-thirds of the panelists – 64 percent – said mortgage rates will remain more or less unchanged over the next seven days. Of those remaining, 29 percent forecast an increase in rates, and just 7 percent said rates will decrease even further.