Long Term Rate Hits Four-Year Low
Long term mortgage interest rates fell again during the week ended December 11 according to the Primary Mortgage Market Survey conducted each week by Freddie Mac. Short term rates bumped up slightly.
The 30-year fixed-rate mortgage (FRM) averaged 5.47 percent with an average 0.7 point for the latest week compared to 5.53 percent with 0.7 point during the week ended December 4. This is the lowest interest rate for the 30-year FRM since March 2004 when it averaged 5.40 percent.
One does not have to go quite so far back to find a lower rate for the 15-year FRM which averaged 5.20 percent with 0.7 point. However, this is the lowest level for that product since February 7 of this year when it averaged 5.15 percent. During the week ended December 4 the rate was 5.33 percent with 0.7 point.
The five-year Treasury-indexed hybrid adjustable-rate mortgage carried an average contract interest rate of 5.82 percent. This was an increase of 5 basis points from week earlier. Fees and points both weeks averaged 0.6.
One-year Treasury-indexed ARMs averaged 5.09 percent with 0.4 point. Last week the average was 5.02 percent with 0.5 point.
"Following the release of the November employment report, which showed the largest monthly decline in jobs since December 1974, bond yields fell slightly this week allowing fixed-rate mortgage rates room to ease back a little further," said Frank Nothaft, Freddie Mac vice president and chief economist.
"The housing market still hangs in the balance, however," Nothaft said. "On a year-over-year basis, after rising in both August and September, pending existing home sales fell 1.0 percent in October, based on figures from the National Association of Realtors®. Meanwhile, conventional mortgage applications for home purchases over the week ending December 5th were up 2.0 percent from four weeks prior, but were still 51 percent below the same period last year, according to the Mortgage Bankers Association."
Yields reported by Fannie Mae earlier in the week indicated that the 30-year FRM has fallen below the 5 percent mark. The average yield for the week ended December 5 was 4.97 compared to 5.09 a week earlier. The 15-year FRM had an average yield of 4.68, down 20 basis points in one week. Government guaranteed FHA and VA 30-year loans were down only slightly - 6.350 last week; 6.380 a week earlier.
One-year ARMs (2/6 percent caps) averaged 5.22 during the week ended December 5 compared to 4.84 the week before.