Mortgage rates return to record lows
Easing Treasury bond yields resulting from worsening economic indicators pushed mortgage rates back down to record low territory.
The Freddie Mac survey showed 30-year fixed-rate mortgages averaged 3.66% for the week ending Thursday — a new low — falling from the prior week's average of 3.71%. Last year at this time, the 30-year FRM averaged 4.50%.
The 15-year FRM, a popular refinancing choice, averaged 2.95% down from last week‘s record average of 2.98%. A year ago, the average rate for a 15-year FRM was 3.69%.
Five-year, Treasury-indexed hybrid adjustable-rate mortgages averaged 2.77% — also a new low — falling from 2.80% last week and 3.25% a year earlier.
And one-year, Treasury-indexed ARMs averaged 2.74%, down from last week’s average of 2.78% and down from 2.99% last year.
Frank Nothaft, Freddie Mac chief economist, cited eased Treasury bond yields and declining industrial productions as reasons for the record low rates.
“In addition, consumer sentiment fell in June to its lowest level this year, according to the University of Michigan survey,” Nothaft said. “In its June 20 monetary policy announcement, the Federal Reserve also noted growth in employment has slowed in recent months and household spending appears to be rising at a somewhat slower pace.
However, some positive indicators hit the housing market.
Construction on single-family homes rose for the third consecutive month in May to an annualized pace of 516,000. And homebuilder confidence rose in June to its highest reading in over five years.
Home loan analytics firm Bankrate, which surveys large banks, reported the 30-year FRM fell slightly to 3.89% from 3.91%, while the 15-year FRM ticked down to 3.16% from 3.17%. The 5/1 ARM fell to 2.97% from 3%.