Mortgage Rates Unchanged For Week

Mortgage rates remained unchanged this week, Freddie Mac Thursday, after a slowdown in consumer spending growth and a tame inflationary reading.

The average rate on 30-year fixed-rate home loans averaged 6.16 percent for the week ending May 3, unchanged from the previous week, the government-backed mortgage finance firm said.

Last year at this time, 30-year mortgage rates - the industry’s benchmark loan - averaged 6.59 percent.

“The recently advanced report of first quarter Gross Domestic Product (GDP) was weaker than expected, growing only 1.3 percent. The housing market alone shaved a full percentage point off real GDP growth,” Frank Nothaft, Freddie Mac V.P. and chief economist, said.

“Additionally, both total consumer spending and price increases in consumer expenditures were quite tame in March. These contributing factors allowed mortgage rates to hold steady this week.”

As mortgage application volume remains tepid, consumer spending predictably grew at its weakest pace in six months in March, the U.S. Commerce Department reported Monday, climbing just 0.3 percent.

The report also included a key inflation measure, known as the core PCE price deflator, a measure closely watched by the Federal Reserve, which remained flat during the month.

The rate on 15-year loans, a popular mortgage refinancing option, averaged 5.87 percent, unchanged from the previous week, Freddie Mac said.

A year ago, the 15-year mortgage averaged 6.22 percent.

Five-year adjustable-rate mortgages eased to 5.87 percent from 5.88 percent last week. The five-year ARM averaged 6.21 percent a year ago.

The average one-year adjustable-rate mortgage fell to 5.42 percent, down from 5.43 percent the previous week.

At this time last year, the 1-year home loan averaged 5.67 percent.

SOURCE: CNN Money