Mortgage Rates Dip Slightly Amid Conflicting Economic Reports
Trying to make sense of the economy is like trying to discern meaning in the shapes of the ever-shifting clouds. Which is another way of saying that mortgage rates fell yet again this week, but they conceivably could have gone up.
The benchmark 30-year fixed-rate mortgage fell for the fifth week in a row, this time by 0.05 percent, to 6.17 percent, according to the Bankrate.com national survey of large lenders. The mortgages in this week’s survey had an average origination fee of 0.3 (also known as points).
The 30-year rate dropped to its lowest level since January 25, when it was also 6.17 percent. One year ago, the mortgage index was 6.36 percent; four weeks ago, it was 6.31 percent.
The 15-year fixed-rate mortgage fell to 5.91 percent from 5.96 percent, while the 5/1 adjustable-rate mortgage (ARM) plummeted a tenth of a point to 6.01 percent.
Plenty of economic data arrived in the last week, and it presented a mixed picture. Existing home sales rose in October when compared to September, but plunged 11.5 percent when compared to the previous October. There was a 7.4-month supply of houses for resale, a sign of a buyer’s market.
The government reported that sales of new houses fell in October, but median prices were 1.9 percent higher than a year earlier. That higher price seems rather hard to believe, and the president of the National Association of Home Builders said that “nearly half of the builders are now trimming prices and most are offering nonprice sales incentives.”
Those incentives take the form of better materials for the same price, paying discount points on buyers’ home mortgage loans, and so forth.
“We have not hit the bottom. That’s a certainty,” according to Ellen Bitton, president of Park Avenue Mortgage, a popular New York mortgage company.
Bitton adds, however, that there are positive factors, the main one being that interest rates have been falling. That gives people an incentive to buy homes now, before mortgage rates rise again. The properties that are well-located and well-priced are still going like hotcakes, she says.
