Mortgage rates remained virtually unchanged across the board this week, trending upward several basis points (bps) but remaining significantly below year-ago levels. Thirty-year fixed rates averaged 5.14% with an average 0.7 point in the week ending August 27, up 2bps from 5.12% last week but still well below 6.4% seen last year, according to the weekly survey by mortgage giant Freddie Mac (FRE). Fifteen-year fixed rates also trended up 2bps, to 4.58% with an average 0.7 point this week from 4.56%. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.67% with an average 0.6 point, up 10bps from 4.57% last week. One-year ARMs remained at 4.69% with an average 0.6 point, unchanged from last week. “Long-term mortgage rates were barely changed this week, remaining historically low, which is helping to sustain a high level of affordability in the home-purchase market,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Low rates contributed to existing home sales rising for the fourth consecutive month to an annual pace of 5.24m in July, the most since August 2007, according to the National Association of Realtors.” A separate survey conducted by Bankrate.com of large US lenders indicated a similar static trend, with 30-year fixed rates edging up 1bp from last week and remains only 4bps above the rate seen four weeks ago. Bankrate also noted 15-year fixed rates slipped 1bp. The continued low rates and positive reception by buyers looking to get into the housing market may prompt lawmakers to extend the first-time homebuyer tax credit past its November 30th expiration date and into 2010, said Bankrate’s Chris Kissell. “Home buying activity is picking up in many US markets, sparking debate about whether a federal tax break deserves kudos for the modest turnaround,” he said. “Coincidentally or not, housing activity has rebounded since the introduction of the credit.” Write to Diana Golobay.
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