Friday, August 5, 2011

Mortgage Rates

Freddie Mac released its weekly mortgage survey yesterday, revealing pointed drops in mortgage rates that were already low to begin with. For some mortgage products, this week brought rates to historically low levels.
According to Freddie Mac’s Primary Mortgage Market Survey, average interest rates for bothfixed-rate mortgages (FRMs) and adjustable rate mortgages (ARMs) dropped significantly for the week ending August 4, 2011
“Treasury bond yields fell markedly after signs the economy was weaker than what markets had previously thought allowing fixed mortgage rates to follow this week with the 15-year fixed and 5-year ARM setting new historical lows,” Frank Nothaft, vice president and chief economist, Freddie Mac, said in a statement.
Average rates for 15-year FRMs came in at 3.54 percent, down from 3.66 percent last week and 3.95 percent last year at this time, while 5-year ARMs averaged 3.18 percent, down from 3.25 percent last week and 3.63 percent at this time last year.
These averages for 15-year FRMs and 5-year ARMs set new historical record lows, Freddie Mac said.
The observed 30-year FRM average of 4.39 percent did not break a historical record but did reach the lowest point of 2011, Freddie Mac noted. Last week, 30-year FRMs averaged 4.55 percent, while one year ago at this time, 30-year fixed mortgages averaged 4.49 percent.
Nothaft said that, despite a weaker-than-expected economy, there are indications of the housing market firming, including the fact that pending home sales have increased for two consecutive months.