The 30-year, fixed rate mortgage dropped to new yearly lows, averaging 4.10% for the week ended Aug. 21, according to Freddie Mac’s latest Primary Mortgage Market Survey.
This is down from the year's previous record low of 4.12% last week and significantly down from 4.58% last year.
In addition, the 15-year, FRM fell to 3.23% from 3.24% a week prior. A year ago, the 15-year, FRM averaged 3.60%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage came in at 2.95%, slightly down from 2.97% a week ago and 3.21% in 2013.
The 1-year Treasury-indexed ARM increased from 2.36% a week ago to 2.38%. Last year this time, the 1-year ARM came in at 2.67%.
“Mortgage rates were down slightly this week, following the decline in 10-year Treasury yields. Meanwhile, housing starts in July jumped 15.7% to 1.093 million units after falling 4% a month earlier. Also, July’s consumer prices increased at a 0.1% seasonally adjusted pace, the slowest in five months,” Frank Nothaft, vice president and chief economist with Freddie Mac, said.
Meanwhile, Bankrate also reported mortgages ratings falling for a second consecutive week, hitting a 14-month low.
The 30-yr, FRM decreased to 4.24%, down from 4.27% last week, while the 15-yr, FRM dropped to 3.37%, down from 3.39% the prior week.
Furthermore, the 5/1 ARM declined to 3.28%, compared to 3.324% a week ago.
“Muted inflation readings and ongoing tensions in hotspots around the globe helped fuel demand for bonds, pushing mortgage rates lower. Mortgage rates are closely related to yields on long-term government bonds. Any time there is reason for nervousness among investors, their movement into the perceived safe haven of bonds is good news for mortgage rates,” Bankrate said.