Home Mortgage Rates Slip Slightly For Week
Rates on 30-year mortgages barely moved in the past week, inching down to 6.68 percent from 6.69 percent, according to a weekly survey released by Freddie Mac.
All other home loan rates slipped as well, with the 1-year adjustable mortgage rates taking the biggest drop, to 5.59 percent from 5.69 percent.
Average rates on 15-year home mortgage loan products - popular for mortgage refinancing seekers - fell to 6.32 percent from 6.37 percent.
And the “5/1″ ARM, set at a fixed rate for five years and adjustable each following year, averaged 6.29 percent, compared to last week’s 6.30.
Frank Nothaft, Freddie Mac V.P. and chief economist, attributed the subtle shift to the bad credit home loan crisis, which sent many investors buying Treasury securities and pushing down bond yields this week.
Mortgage rates and bond yields are linked, he said.
Nothaft also added (somewhat surprisingly to many observers) that there are signs the housing market is actually close to stabilizing.
“As construction spending levels off, the drag on GDP growth will continue to diminish. Meanwhile, the 5 percent rise in pending home sales in June suggests that sales in July and August may reverse last month’s decline,” he said.
On Wednesday, the National Association of Realtors reported that in June pending sales of existing homes (different than new construction) rose at their fastest pace in more than three years.
Even with the downward nudge this week, average mortgage rates on 30-year home loans were above their year-ago level of 6.63 percent.
At the same time last year, the 15-year mortgage loan was 6.27 percent, as was the “5/1″ ARM. The one-year adjustable-rate mortgage averaged 5.69 percent.
Freddie Mac said that a mortgage lender charged an average of 0.3 percent in fees and points, down from 0.4 percent last week, and 0.5 percent on hybrid mortgages, both unchanged from a week ago.
Freddie Mac is a mortgage company chartered by Congress that buys home loans from lenders and packages them into securities to sell to U.S. investors or to hold in its own portfolio.
SOURCE: Reuters