Mortgage Rate Increase Comes to a Close
Mortgage rates ended a weeks-long run of increases in two weekly surveys. The Freddie Mac (FRE) survey put the average rate for a 30-year fixed-rate mortgage (FRM) at 5.07% with a 0.6 origination point for the week ending April 15, down from last week’s average of 5.21%. A year ago, the average rate was 4.82%. “After rising for four consecutive weeks, mortgage rates eased back to where they were two weeks ago and still remain historically low,” said Frank Nothaft, Freddie Mac vice president and chief economist. The Bankrate.com survey of large banks and thrifts put the average rate for a 30-year FRM at 5.21% with a 0.38 origination point, down 14bps from the previous week’s average of 5.35%. “Low mortgage rates continue to help stabilize the housing market. The Fed noted that residential activity increased while home prices were stable across most of its 12 Districts over the six weeks prior to April 5th,” Nothaft said. “In addition, credit standards remained generally unchanged across the nation, while credit quality was mixed according to the report.” Freddie said the 15-year FRM averaged 4.4% with an average 0.7 point, down from last week when it averaged 4.52% and one year ago, when the average was 4.48%. Bankrate.com put the average rate for a 15-year FRM at 4.56%, down from last week’s average of 4.69%. Freddie said the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.08% with an average 0.6 point this week, down from last week when it averaged 4.25%. A year ago, the 5-year ARM averaged 4.88%. In addition, Freddie said the one-year Treasury-indexed ARM averaged 4.13% this week with an average 0.5 point, down from last week when it averaged 4.14%. At this time last year, the 1-year ARM averaged 4.91%. Bankrate.com put the average five-year ARM rate at 4.48%, down from last week’s average of 4.5%. There was considerable concern that mortgage rate would skyrocket at the conclusion of the Fed’s $1.25trn mortgage-backed securities (MBS) purchase program. And for a few weeks, with rates continuing to climb, it seemed like that was the case. But this week’s results change that. “People think the (economic) recovery is happening, but it's not happening,” said Michael Moskowitz, president of Equity Now, a mortgage bank based in New York City in an interview with Bankrate.com. “Inflation is down, the recovery is not as strong as they think it is, the market's up. I just think that we are in for five, 10 years of quote-unquote 'Japan,' and that means lower rates,” he added, referring to Japan’s “Lost Decade” of economic stagnation in the 1990s. Write to Austin Kilgore.