After a slight drop last week, mortgage rates continued to fall in the week ending March 19, reaching near-record lows, according to Freddie Mac’s (FRE) Primary Mortgage Market Survey released Thursday. 30-year fixed-rate mortgages averaged 4.98 percent with an average 0.7 point, down from last weeks 5.03 percent average, and significantly below the average last year at this time — 5.87 percent. “Long-term mortgages followed bond yields lower for the second week as reports of slower industrial production suggested that business spending might ease this year,” said Frank Nothaft, FreddieMac vice president and chief economist. “Following the March 18th Federal Reserve monetary policy statement, which announced further spending initiatives on financial assets, long-term bond yields plummeted.  Yields on 10-year Treasury bonds fell by about a half percentage point after the announcement, marking the largest one-day decline since October 20, 1987.” 15-year fixed-rate mortgages were no exception to the falling trend, dropping from 4.64 percent last week to 4.61 percent this week. The 15-year FRM has not been lower since June of 2003, when it averaged 4.6 percent, according to Freddie Mac. Five-year Treasury-indexed ARMs also slouched this week, averaging 4.98 percent compared to 4.99 percent last week. One-year Treasury-indexed ARMs, however, rose to 4.91 percent from 4.80 percent last week. At this time last year, the 1-year ARM averaged 5.15 percent. A separate survey conducted by Bankrate.com also found that mortgage rates slid close to all-time lows. The benchmark 30-year fixed-rate, according to Bankrate, declined 8 basis points to 5.29 percent, while the benchmark 15-year fixed-rate fell 2 basis points to 4.86 percent. Bankrate’s Chris Kissell points out that the survey occurred before the Federal Reserve’s announcement Wednesday to purchase additional long-term Treasury bonds and mortgage-backed securities; meaning, rates have fallen further and it’s not unlikely they’re continuing to do so as you read this sentence. Write to Kelly Curran at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade

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