Mortgage Rates Plunge to New Lows

Fixed-rate mortgages reached new record lows for the sixth-straight week as long-term Treasury bond yields declined further following downwardly revised economic growth and job creation data.

The Freddie Mac survey showed the 30-year FRM averaged 3.67% for the week ending Thursday — a new low — ticking down from the prior week’s record average of 3.75%. Last year at this time, the 30-year FRM averaged 4.49%.

The 15-year FRM, a popular refinancing choice, averaged 2.94% — also a new low — down from last week‘s record average of 2.97%. A year ago, the average rate for a 15-year FRM was 3.68%.

Five-year, Treasury-indexed hybrid adjustable-rate mortgages averaged 2.84%, unchanged from last week and down from 3.28% a year earlier.

And one-year, Treasury-indexed ARMs averaged 2.79%, up from last week’s average of 2.75% and down from 2.95% last year.

A downward revision of economic growth and job creation data helped push rates to record depths.

Gross domestic product rose 1.9% in the first quarter, after originally being reported as 2.2%, led by gains in inventories, more government cutbacks and the slowest increase in corporate profits in over three years.

Freddie Mac Chief Economist Frank Nothaft pointed out that the economy added 69,000 jobs in May, less than half of the market consensus forecast and revisions subtracted a total of 49,000 workers in March and April. And the unemployment rate ticked up from 8.1% in April to 8.2%

Home loan analytics firm Bankrate, which surveys large banks, reported the 30-year FRM fell slightly to 3.92% from 3.94%, while the 15-year FRM rose a bit to 3.16% from 3.15%. The 5/1 ARM declined to 2.99% from 3.01%.

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Posted in Home Ownership, RE News.

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