Mortgage Rates Hold Stable
After two weeks of inching downward, mortgage rates changed very little in the week ending February 26, according to Freddie Mac's (FRE) Primary Mortgage Market Survey released Thursday. 30-year fixed-rate mortgages averaged 5.07 percent with an average 0.7 point, up just slightly from last week's average of 5.04 percent. Last year at this time, the 30-year fixed-rate mortgage average sat significantly higher at 6.24 percent. “Mortgage rates were little changed this week amid mixed data reports of a slowing economy,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Both the core Producer Price and Consumer Price Indexes ticked up in January, higher than the market consensus, while consumer confidence in February fell to the lowest reading since records began in January 1967." 15-year fixed rate mortgages averaged 4.68 percent with a 0.7 point this week, according to Freddie Mac, which is identical to last week's average but well below the year-ago reading of 5.72 percent. One-year Treasury-indexed ARMs climbed -- although barely -- from 4.8 percent last week to 4.81 percent this week. Five-year Treasury-indexed ARMs averaged 5.06 percent this week, up from last week's 5.04 percent average, and well below the year-ago average of 5.43 percent. “Lower house prices and affordable mortgage rates have yet to spur housing demand," Nothaft said. "For instance, house prices declined by 8.7 percent for the 12 months ending in December 2008 and were down 10.9 percent from their highs set in April of 2007, according to the Federal Housing Finance Agency’s purchase-only monthly home price index. However, existing home sales fell 4.7 percent in January to 4.05 million units (annualized), the slowest pace since July 1997.” In a separate survey, conducted by Bankrate.com, findings similar to those of Freddie Mac's were reported. The benchmark 30-year fixed-rate mortgage, according to Bankrate, rose a mere 7 basis points to 5.41 percent this week. The benchmark 15-year fixed-rate mortgage was unchanged at 4.93 percent. According to the survey's findings, mortgage rates have remained below 5.5 percent for three weeks in a row -- astonishingly low from a historical perspective. "Bankrate's weekly mortgage survey began in September 1985," said Bankrate's Holden Lewis. "In that time, there is only one period in which the 30-year fixed rate remained under 5.5 percent for longer than this three-week slide. That was May and June of 2003, the height of a refinance boom." Write to Kelly Curran at firstname.lastname@example.org. 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.