Mortgage Rates Decline Again This Week

Across the nation, mortgage rates fell for the third straight week, a trend coming only after they rose substantially over the previous several months.

Freddie Mac, the government-backed home loan buyer, said the average 30-year fixed-rate home mortgage rates declined to 6.59 percent for the week ending August 9 - down a bit from 6.68 percent last week.

Last year at this time, 30-year mortgage rates averaged 6.55 percent. Many believe the decline is partially due to higher unemployment data in recent weeks.

“Job creation fell short of market expectations, with 92,000 jobs added in July, the smallest gain since February, and June’s number was revised down by 6,000. In addition, the unemployment rate moved upward for the first time in four months,” said Frank Nothaft, Freddie Mac’s chief economist.

The lending giant said a recent dramatic drop in mortgage refinancing was due to both tighter lending standards and cooling home prices.

“Freddie Mac reported that the total amount of home equity loans cashed out via refinancing was $76.7 billion in the second quarter. Although slightly higher than the previous quarter’s level, it still reflected a drop of $24.5 billion compared to the same quarter last year,” said Nothaft.

“Both the tightening of underwriting standards and slackening home price appreciation are possible contributing factors to the decline.”

Rates on 15-year fixed-rate home loans averaged 6.25 percent in the latest week, down from 6.32 percent last week. A year ago, the 15-year loan - a popular mortgage refinance product - averaged just 6.20 percent.

Five-year adjustable-rate mortgages (ARMs) averaged 6.33 percent this week, up from 6.29 percent last week. One year ago, the 5-year ARMs averaged 6.21 percent.

One-year ARMs averaged 5.65 percent this week, up from 5.59 percent last week. At this time last year, the 1-year adjustable mortgage loans were just 5.69 percent.