Fixed mortgage rates fell in the week ending July 5 as consumer spending and declining manufacturing activity pushed long-term Treasury bond yields lower, Freddie Mac said in its latest primary mortgage market survey.
As those yields edged lower, it allowed fixed mortgage rates to hit new all-time record lows, Freddie said.
The average 30-year, fixed-rate mortgage fell from 3.66% last week to 3.62% in the most recent survey. In addition, the 15-year, FRM fell from 2.94% to 2.89%. A year ago, the same rate held at 3.75%.
Meanwhile, the 5-year Treasury-indexed ARM fell from 3.30% a year ago to 2.79% last week. In addition, the 1-year Treasury-indexed ARM fell from 2.74% last week to 2.68%. A year earlier the same rate hovered at 3.01%.
"Recent economic data releases of less consumer spending and a contraction in the manufacturing industry drove long-term Treasury bond yields lower over the week and allowed fixed mortgage rates to hit new all-time record lows," said Frank Nothaft, chief economist for Freddie Mac.
"Growth in personal expenditures was revised downward to an annualized rate of 2.5% in the final GDP estimates for the first quarter of the year. In addition, monthly consumer spending in April was revised from a 0.3% gain to 0.1% and was unchanged in May."
Manufacturing also slowed putting a damper on the nation's overall economic outlook.