Mortgage rates cooled off this week, showing mortgage rates easing along as the market remains uncertain about how long the Federal Reserve’s aggressive bond-buying program will ultimately last.
This week rates inched down, with the 30-year, fixed-rate mortgage coming in at 4.37%, down from 4.51% last week, but up from 3.53% last year, Freddie Mac reported in its Primary Market Survey.
The 15-year, FRM decreased to 3.41%, down from 3.53% and a steep rebound from 2.83% last year.
Meanwhile, the 5-year Treasury-index adjustable-rate mortgage averaged 3.17%, down from 3.26% last week and an increased from 2.69% a year earlier.
Additionally, the 1-year Treasury-index ARM was 2.66%, unchanged from a week earlier, but down from 2.69% a year ago.
"Fixed mortgage rates fell as Federal Reserve (Fed) Chairman Bernanke helped ease market concerns about the Fed reducing its bond purchases. During a question and answer session following a speech on July 10th, Chairman Bernanke indicated that a highly accommodative monetary policy is what’s needed in the U.S. economy," said Frank Nothaft, vice president and chief economist for Freddie Mac.
He added, "Indications of a slowing in the economic recovery also placed downward pressure on mortgage rates. Consumer sentiment fell to a three-month low in July while retail sales in June grew by only 0.4%, which was half of the market consensus forecast. In addition, housing starts fell in June to the slowest pace since August 2012."
Bankrate (RATE) data also show mortgage rates dropping.
Bankrate’s 30-year FRM dropped to 4.56% from 4.66% a week earlier.
In addition, the 15-year, FRM decreased to 3.65%, down from 3.75%. The 5/1 ARM also declined to 3.56% from 3.63%.