Are record-low interest rates masking high-cost mortgage lending?

Are record-low interest rates masking high-cost mortgage lending?

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It's official: Mortgage rates lower than 2013

...but at the expense of GDP

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Mortgage rates officially dropped lower than last year’s levels, as rates fell due to the release of the first quarter real GDP final estimate, according to the latest Freddie Mac Primary Mortgage Market Survey.

The 30-year, fixed rate mortgage averaged 4.14% for the ended June 26, down from 4.17% last week and 4.46% a year ago.

In addition, the 15-yr, FRM dropped to 3.22% from 3.30% last week and 3.50% in 2014.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage decreased from 3% a week ago to 2.98%. This is also down from 3.08% last year.

The 1-year Treasury-indexed ARM averaged 2.40%, slightly down from 2.41% the previous week and 2.66% last year.  

“Mortgage rates were down following the release of first quarter real GDP final estimate, which fell at a 2.9% annualized rate, a steeper than expected decline and the worst reading since the first quarter of 2009,” said Frank Nothaft, vice president and chief economist with Freddie Mac.

“Also, the seasonally-adjusted S&P/Case-Shiller 20-city home price index was up only 0.2 percent in April from the previous month. On a year-over-year basis, prices remained strong in April up 10.8 percent, but slower than the 12.3 percent in March,” he added.

Bankrate recorded similar results, with the 30-year, FRM falling for the second week in a row to 4.28%.

Furthermore, the 15-yr, FRM dipped to 3.39% from 3.44%, while the 5/1 ARM decreased to 3.33% from 3.37% a week ago. 

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