Mortgage Rates Hit Six-Week Low at 5 Percent
It appears for the time being, the end of the Fed’s $1.25trn mortgage-backed securities (MBS) purchase program hasn’t resulted in mortgage rates skyrocketing up. In fact, rates are down for the second consecutive week and according to Freddie Mac (FRE), are at the lowest level in six weeks. The Freddie Mac weekly survey put the average rate for a 30-year fixed-rate mortgage at 5% with an average 0.7 point origination point for the week ending May 6, down from last week’s average of 5.06%. A year ago, the 30-year FRM averaged 4.84%. The Bankrate.com survey of large banks and thrifts put the average rate for a 30-year FRM at 5.12% with a 0.47 origination point, down from last week when it averaged 5.21%. Freddie said the 15-year FRM averaged 4.36% with an average 0.7 point, down from last week when it averaged 4.39%. A year ago, the 15-year FRM averaged 4.51%. Bankrate.com said the 15-year FRM averaged 4.49% with a 0.47 point, down from 4.54% last week. “Treasury bond and note yields declined this week, and rates on fixed-rate mortgages and hybrid [adjustable-rate mortgages] ARMs followed suit,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Rates for both the 30-year and 15-year fixed-rate mortgages were the lowest in six weeks; initial rates on 5/1 hybrid ARMs hit an all-time low since they were added to the survey in the beginning of 2005.” The Freddie survey put the average rate for a five-year Treasury-indexed hybrid ARM at 3.97% with an average 0.7 point this week, down from last week when it averaged 4%. A year ago, the 5-year ARM averaged 4.9%. Freddie also said the average rate for a one-year Treasury-indexed ARM averaged 4.07% with an average 0.6 point, down from last week when it averaged 4.25%. At this time last year, the 1-year ARM averaged 4.78% Bankrate.com put the average rate for a five-year ARM at 4.31% with a 0.47 point, down from 4.37% last week. Write to Austin Kilgore. The author held no relevant investments.