Mortgage Rates Drop, Reach Lowest Level in Two Years
While the MBA reported a sharp drop in refi activity earlier this week and said that rates on one year ARMs have risen in step with Libor, most other mortgage rates are continuing to decrease, according to a report released yesterday. Freddie Mac said in its weekly mortgage rate survey that mortgage rates have reached their lowest level in two years, with 30-year fixed-rate mortgages averaging 6.10 percent with an average 0.5 point for the week ending November 29, 2007, down from 6.20 percent one week earlier. The rate on a 30-year fixed-rate mortgages have not been lower since the week ending October 13, 2005, when it averaged 6.03 percent, Freddie said in a press statement. 5-year adjustable-rate mortgages also saw rates drop to new lows, with hybrid ARMs averaging 5.86 percent this week, with an average 0.5 point, down from last week when it averaged 5.88 percent. The 5-year ARM has not been lower since the week ending January 26, 2006, when it averaged 5.75 percent. â€œInterest rates for U.S. Treasury securities have been drifting lower this month over market concerns that the housing slump and stress in the credit markets could slow future economic growth,â€? said Frank Nothaft, Freddie Mac vice president and chief economist. â€œAs a result, interest rates for fixed-rate mortgages had room to slip lower this week. In addition to these concerns, the Federal Reserve also noted in its November 28th Beige Book that the glut of available homes continued, keeping downward pressure on prices and construction activity. â€œAdd to this the S&P/Case-Shiller 20-composite index showing house prices falling 4.95 percent in the 12-months ending September, with 15 of the metropolitan areas showing annual declines and the overall picture does, indeed, appear glum with no immediate relief in sight.â€? For more information, visit http://www.freddiemac.com.