Interest Rate Declines Continue into February

Author: Tory Barringer February 6, 2014 

This week brought more news of declines in mortgage interest rates, according to releases from Freddie Mac and Bankrate.com.
In its weekly published Primary Mortgage Market Survey, Freddie Mac put the average 30-year fixed mortgage rate at 4.23 percent (0.7 point) for the week ending February 6, down from 4.32 percent previously. A year ago, the 30-year fixed-rate mortgage (FRM) sat at 3.53 percent.
The 15-year FRM averaged 3.33 percent (0.7 point) this week, down from last week’s 3.40 percent.
Averages on adjustable-rate mortgages (ARMs) also fell, with the 5-year Treasury-indexed hybrid ARM dropping 4 basis points to 3.08 percent (0.5 point) and the 1-year ARM decreasing the same amount to 2.51 percent (0.5 point).
Frank Nothaft, VP and chief economist for Freddie Mac, once again pointed to weaker housing data as a factor in this week’s rate changes, noting declines in December pending home sales and a negative contribution to GDP from fixed residential investment.
“Also, the Institute for Supply Management reported a significant slowing in growth in the manufacturing industry in December than the market consensus forecast,” Nothaft added.
In its own weekly survey, Bankrate reported a drop of 7 basis points in the 30-year fixed average to 4.43 percent, with the 15-year fixed falling 6 points to 3.50 percent.
The 5/1 ARM also declined, decreasing 10 basis points to 3.27 percent.
“Worries about a slowdown in the U.S. and global economics and continued skittishness about the health of emerging markets is pushing investors into safe haven U.S. Treasury securities,” Bankrate said in a release. “This has brought the benchmark 10-year Treasury yield from 3 percent down into the 2.6 percent neighborhood, with mortgage rates hitting levels last seen