Rates Give Back Last Week's Increases, Setting New Record Lows
02/02/2012 By: Carrie Bay
Average mortgage interest rates have reversed from the upward blip reported last week.
Declines this week completely erased the previous week’s increases, as the average rate attached to the 30-year fixed-rate mortgage, 15-year fixed-rate mortgage, and 5-year adjustable-rate mortgage all settled in at new record lows, Freddie Mac reported Thursday.
The GSE attributed the about-face to the fact that recent data on economic growth fell short of market projections.
Freddie Mac’s weekly market survey shows the 30-year fixed mortgage averaged 3.87 percent (0.8 point) for the week ending February 2. It plunged 11 basis points from 3.98 percent the week prior, which saw a 10 basis point
Declines this week completely erased the previous week’s increases, as the average rate attached to the 30-year fixed-rate mortgage, 15-year fixed-rate mortgage, and 5-year adjustable-rate mortgage all settled in at new record lows, Freddie Mac reported Thursday.
The GSE attributed the about-face to the fact that recent data on economic growth fell short of market projections.
Freddie Mac’s weekly market survey shows the 30-year fixed mortgage averaged 3.87 percent (0.8 point) for the week ending February 2. It plunged 11 basis points from 3.98 percent the week prior, which saw a 10 basis point
jump in one week’s time. Last year at this time, the 30-year rate averaged 4.81 percent.
The 15-year fixed-rate mortgage this week averaged 3.14 percent (0.8 point), down from 3.24 percent last week. A year ago, the 15-year rate was averaging 4.08 percent.
The 5-year adjustable-rate mortgage (ARM) came in at 2.80 percent (0.7 point) this week. It was 2.85 percent last week and 3.69 percent this time last year.
The 1-year ARM was the only product in Freddie Mac’s study that did not set a new low. It averaged 2.76 percent (0.6 point) this week, which represents an increase from 2.74 percent last week. At this time last year, the 1-year ARM was 3.26 percent.
Commenting on the latest survey results, Frank Nothaft, Freddie’s chief economist, noted that most mortgage rates eased to all-time record lows as fourth quarter growth in the economy came in well under market expectations.
“Gross Domestic Product rose 2.8 percent in the final three months of 2011, below the market consensus forecast of 3.0 percent, while consumer spending in December was flat,” Nothaft explained.
The one bright spot in the latest economic data, Nothaft says, was that fixed residential investment increased for the third consecutive quarter and residential construction spending rebounded in December, rising 0.7 percent.
The 15-year fixed-rate mortgage this week averaged 3.14 percent (0.8 point), down from 3.24 percent last week. A year ago, the 15-year rate was averaging 4.08 percent.
The 5-year adjustable-rate mortgage (ARM) came in at 2.80 percent (0.7 point) this week. It was 2.85 percent last week and 3.69 percent this time last year.
The 1-year ARM was the only product in Freddie Mac’s study that did not set a new low. It averaged 2.76 percent (0.6 point) this week, which represents an increase from 2.74 percent last week. At this time last year, the 1-year ARM was 3.26 percent.
Commenting on the latest survey results, Frank Nothaft, Freddie’s chief economist, noted that most mortgage rates eased to all-time record lows as fourth quarter growth in the economy came in well under market expectations.
“Gross Domestic Product rose 2.8 percent in the final three months of 2011, below the market consensus forecast of 3.0 percent, while consumer spending in December was flat,” Nothaft explained.
The one bright spot in the latest economic data, Nothaft says, was that fixed residential investment increased for the third consecutive quarter and residential construction spending rebounded in December, rising 0.7 percent.
No comments:
Post a Comment