After inching back up in the previous week, the 30-year fixed rate mortgage (FRM) has again plummeted to a new low, Freddie Mac reported Thursday.
According to Freddie Mac’s Primary Mortgage Market Survey (PMMS), average mortgage rates are easing, even in the face of troubling economic signs. The 30-year FRM averaged 3.66 (0.7 point) for the week ending June 21, down from 3.71 percent the previous week. At the same time in 2011, the 30-year FRM averaged 4.5 percent.
The 15-year FRM averaged 2.95 percent (0.6 point), down from 2.98 percent in the last survey and a year-over-year drop from 3.69 percent.
Adjustable rate mortgages (ARM) both slipped down, as well, with the 5-year ARM averaging 2.77 percent (0.6 point), down from the last reading of 2.80 percent and a year-over-year decrease from 3.25 percent. The 1-year ARM averaged 2.74 percent (0.5 point), a drop from 2.78 percent last week and from 2.99 percent last year.
“Treasury bond yields eased somewhat this week on some worsening economic indicators, bringing mortgage rates back into record low territory. Industrial production fell in two of the last three months ending in May, and below the expected market consensus forecast,” said Frank Nothaft, VP and chief economist for Freddie Mac. “In addition, consumer sentiment fell in June to its lowest level this year, according to the University of Michigan survey. In its June 20 monetary policy announcement, the Federal Reserve also noted growth in employment has slowed in recent months, and household spending appears to be rising at a somewhat slower pace.”
“However, there were also some positive indicators on the housing market,” he continued. “Construction on one-family homes rose for the third consecutive month in May to an annualized pace of 516,000. Furthermore, homebuilder confidence rose in June to its highest reading in over five years.”
Bankrate’s weekly survey showed similar results: The 30-year fixed averaged 3.89 percent for the week ending June 21, down from the previous week’s average of 3.91 percent. The 15-year fixed fell to 3.16 percent from 3.17 percent.
The 5-year ARM averaged 2.97 percent, down from 3.00 percent previously.
“The Federal Reserve is hoping to keep this streak of record low mortgage rates alive. By extending Operation Twist through year-end, the Fed aims to preserve this environment of ultra-low mortgage rates that is facilitating refinancing and putting money into people’s pockets that they’re not getting through their paychecks,” said Bankrate in its report.
Bankrate’s survey is based on data from the top 10 banks and thrifts in the top 10 markets while Freddie Mac’s survey uses 25 lenders from each of the five regions it covers.
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