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Mortgage

Mortgage rates set more record lows

A weakening economy and the Federal Reserve’s continued purchase of mortgage securities took the 30-year, fixed-rate mortgage to historic lows for the second straight week

The Freddie Mac survey showed the 30-year FRM averaged 3.36% for the week ending Thursday, falling below the all-time low of 3.4% set last week. Last year at this time, the 30-year FRM averaged 3.94%.

The 15-year FRM, a popular refinancing choice, averaged 2.69%, falling from 2.73% last week and setting a new record low. A year ago, the average rate for a 15-year FRM was 3.26%.

Five-year, Treasury-indexed, hybrid adjustable-rate mortgage averaged 2.72%, up a bit from 2.71% last week and falling from 2.96% a year earlier.

The Federal Reserve’s purchase of long-term fixed mortgage securities pushed 15-year FRMs below 5-year ARMs for the first time since the week of October 15, 2009.

One-year, Treasury-indexed ARMs averaged 2.57%, down from last week’s 2.60%. A year ago, it averaged 2.95%.

Freddie Chief Economist Frank Nothaft cited a weakening economy as a reason for the historic lows.

The final estimate of growth in gross domestic product was revised down to 1.3% in the second quarter, representing the slowest growth in a year. Personal incomes rose only 0.1% in August, while July’s increase was revised downward.

And pending home sales in August fell 2.6%, well below the market consensus forecast of a slight increase.

Home loan analytics firm Bankrate, which surveys large banks, reported that the 30-year FRM fell to 3.52% from 3.55%, while the 15-year FRM dropped to 2.84% from 2.88%. The 5/1 ARM slipped to 2.67% from 2.68% for the week.

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@JustinHilley

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