With Home Sales Down, Mortgage Rates Reach New Lows
The average rate for 30-year fixed-rate mortgages (FRM) reached record lows in two weekly surveys. The Freddie Mac (FRE) weekly rate survey put the average rate for a 30-year FRM at 4.69% with a 0.7 origination point. That's the lowest the point in Freddie Mac's survey, down from last week's average of 4.75% and a year ago, when it averaged 5.42%. The Bankrate survey of large banks and thrifts was also down to record lows this week, averaging 4.81% with a 0.44 origination point, down from last week's average of 4.88%, the previous record low that stood for two weeks. “Mortgage rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in housing market slowed in May following the expiration of the homebuyer tax credit,” said Frank Nothaft, Freddie Mac vice president and chief economist. Freddie said the 15-year FRM averaged 4.13% with a 0.6 origination point this week, a new record low and down from last week's average of 4.2% and a year ago, when it averaged 4.87%. Bankrate put the average rate for a 15-year FRM at 4.26% with a 0.44-origination point. The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84% with an average 0.7 point, also a record low and down from last week's averaged of 3.89% and a year ago, when it averaged 4.99%. Bankrate put the average rate for a five-year ARM at 4.13% with a 0.44 origination point, down from last week's average of 4.07%. The new lows in mortgage rates come on the heels of sobering housing data that showed sales of existing homes declined 2.2% and new home sales were down 32.7% in May. Freddie said the one-year ARM averaged 3.77% with a 0.7 origination point, down from last week when it averaged 3.82%. A year ago, the average rate for a one-year ARM was 4.93%. While not a new record low, it’s the lowest average rate for one-year ARMs since May 2004, when it averaged 3.76%. The record low for one-year ARMs was reached in March 2004. Freddie began tracking 30-year FRM rates in 1971, 15-year FRMs in 1991, and five-year ARMs in 2005. Bankrate began its survey in 1985. Write to Austin Kilgore. The author held no relevant investments.