Mortgage rates plummet to new lows
The Federal Reserve’s continued purchase of mortgage securities took the 30-year fixed-rate mortgage down to unchartered territory this week.
The Freddie Mac survey showed the 30-year, FRM averaged 3.4% for the week ending Thursday, breaking through it’s all-time low set in July and falling from last week’s 3.49%. Last year at this time, the 30-year FRM averaged 4.01%.
All mortgage products, except the 5-year adjustable-rate mortgage, averaged all-time lows.
The 15-year FRM, a popular refinancing choice, averaged 2.73%, falling from 2.77% last week and setting a record low. A year ago, the average rate for a 15-year FRM was 3.28%.
Five-year, Treasury-indexed, hybrid ARM averaged 2.71%, up from 2.76% last week and falling from 3.02% a year earlier.
One-year, Treasury-indexed ARMs averaged 2.6%, down from last week’s 2.61%. A year ago, it averaged 2.83%.
“Fixed mortgage rates continued to decline this week…and should support an already improving housing market,” Freddie Chief Economist Frank Nothaft said.
He cited the S&P/Case-Shiller home price index, which rose 1.2% percent over the 12 months ending in July, reflecting the largest annual increase since August 2010. Sixteen of the 20 cities tracked in the index saw price growth, led by Phoenix’s 16.6% gain. And new home sales in July and August had the strongest two-month pace since March and April 2010.
Home loan analytics firm Bankrate, which surveys large banks, reported that the 30-year FRM fell dramatically to 3.55% from 3.7%, while the 15-year FRM dropped to 2.88% from 2.95%. The 5/1 ARM slipped to 2.68% from 2.69% for the week.