Mortgage Rates Hit Another Record Low

You guessed it. Mortgage rates fell again in the week ending April 2, hitting another record-breaking low, according to Freddie Mac’s (FRE) Primary Mortgage Market Survey released Thursday. 30-year fixed-rate mortgages averaged 4.78 percent with an average 0.7 point, down from last week’s 4.85 percent average, and far below the average last year at this time — 5.88 percent. “Mortgage rates followed other interest rates lower this week amid reports of slower economic growth” said Frank Nothaft, Freddie Mac vice president and chief economist.  “The final estimate of economic growth in the fourth quarter was revised lower and personal incomes fell 0.2 percent in February, below the market consensus.” This week’s 15-year fixed-rate mortgage eased as well, falling from 4.58 percent last week to 4.52 percent this week, marking the lowest 15-year FRM in the life of Freddie Mac’s weekly survey, which dates back to 1991. At this time last year, the 15-year FRM averaged 5.42 percent. The survey found Five-year Treasury-indexed ARMs averaged 4.92 this week, down from last week’s average of 4.96 percent, and One-year Treasury-indexed ARMs averaged 4.75 percent, compared to 4.85 percent last week. Despite reports of slower economic growth this week — which is likely a major factor in falling rates — Freddie Mac’s Nothaft said we are seeing some positive movement in the economy, as a result of those rates. “[P]ending existing home sales rose 2.1 percent in February, marking the second increase in three months as potential homebuyers are taking advantage of historically low mortgage rates and falling home prices,” Nothaft said. “Serving as a spur to sales, housing affordability reached an all-time high in February 2009 since the series’ inception in 1971, according to the National Association of Realtors.  By region, sales surged by nearly a third in the Northeast and Midwest, but fell in the West.” A separate rates survey conducted by Bankrate.com also found that mortgage rates dropped to all-time lows this week. According to Bankrate, the benchmark 30-year fixed-rate fell 6 basis points to 5.13 percent, while the benchmark 15-year fixed-rate fell 7 basis points to 4.73 percent. Write to Kelly Curran at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.