Mortgage Rates Finally Fall After Five Consecutive Gains
Rates on 30-year mortgage loans, after rising for five consecutive weeks, edged down slightly as investors digested the news suggesting economic problems stemming from the housing market could last longer than hoped.
Freddie Mac reported Thursday that 30-year, fixed-rate mortgage loans cost 6.69 percent in interest this week, down from 6.74 percent a week ago, at which point rates had jumped to their highest in 11 months.
The mortgage rate retreat occurred as markets saw weak reports on housing as indications that troubles are continuing.
The government reported that construction of new homes fell by 2.1 percent in May, leaving building activity 24.2 percent below the level seen a year ago, while the National Association of Home Builders’ index of home builder confidence fell to a 16-year low.
Builders have been slashing listing prices and offering other incentives to move a glut of unsold homes. Demand has been hurt by troubles in bad credit mortgage loans, as well.
“U.S. mortgage rates eased this week due to concerns that the market will be a longer drag on the economy,” said Frank Nothaft, Freddie Mac’s chief economist.
The U.S. economy slowed to 0.6 percent growth in the first three months of this fiscal year, its weakest performance in more than four years. A slow housing market one of the key components depressing activity.
All mortgage rates showed declines this week. Rates on 15-year, fixed-rate home loans, a popular choice for mortgage refinancing seekers, fell to 6.37 percent, a decline from 6.43 percent.
Five-year adjustable-rate mortgages, meanwhile, averaged 6.31 percent, down from 6.37 percent, while one-year ARMs fell to 5.66 percent, down from 5.75 percent a week prior.
The mortgage rates quoted here do not include points.
Thirty-year and 15-year home loans carried an average fee of 0.5 points. Five-year adjustable mortgages carried a fee of 0.6 point while one-year ARMs had a fee of 0.7 point.
A year ago, the 30-year home loan rate stood at 6.71 percent, 15-year mortgages were at 6.36 percent, five-year ARMS averaged 6.32 percent and one-year ARMs 5.75 percent.
SOURCE: San Diego Union-Tribune