Industry data released Thursday show borrowing costs for home loans falling to new lows, slipping further from what was already reported as the lowest level for mortgage interest rates in more than a half-century. Economists attribute the continuing declines to ongoing employment concerns and economic uncertainty.
Freddie says last year at this time the 30-year rate was averaging 4.35 percent.
The 15-year fixed rate came in at 3.33 percent (0.6 point) this week in Freddie’s survey. That’s down from 3.39 percent last week. A year ago at this time, the 15-year rate averaged 3.83 percent.
The 5-year adjustable-rate mortgage (ARM) was unchanged this week, matching its all-time low set last week at 2.96 percent (0.6 point). This time last year, the 5-year ARM carried an average rate of 3.56 percent.
Freddie Mac’s study shows the 1-year ARM is now averaging 2.84 percent (0.6 point), down from last week’s average of 2.89 percent. It was 3.46 percent 12 months ago.
“Market concerns over Eurozone sovereign debt default and a weak U.S. employment report for August placed downward pressure on Treasury bond yields and allowed fixed mortgage rates to hit new lows this week,” explained Frank Nothaft, Freddie Mac’s chief economist.
He notes that last month’s jobs data showed no net gains, the poorest showing since September 2010, with the national unemployment rate holding above 8 percent for the 31st consecutive month. That’s the longest stretch of such elevated joblessness in 70 years, according to Nothaft.
By Carrie Bay, DSNews.com