Indications Of A Sluggish Economic Recovery Push Long-Term Mortgage Rates To New Lows This Week This Week
August 9, 2002
30-Year Fixed-Rates Fall To 32-Year Low In Freddie Mac Survey
McLean, VA – In Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.31 percent, with an average 0.6 point, for the week ending August 9, 2002, falling from 6.43 percent last week. Last year at this time, the 30-year FRM averaged 7.00 percent. This week's figure breaks the previous 32-year low in Freddie Mac's survey that was recorded just two weeks ago.
The average for the 15-year FRM this week is 5.69 percent, with an average 0.6 point, down from last week's average of 5.84 percent. A year ago, the 15-year FRM averaged 6.54 percent. This is the lowest the 15-year FRM has been since Freddie Mac started tracking it in August of 1991.
One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.37 percent this week, with an average 0.6 point, dropping from last week's average of 4.45 percent. This time last year, the one-year ARM averaged 5.70 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
"Recent downward revisions of GDP for 2001 and first quarter 2002 suggest that the economy faces weak growth," said Frank Nothaft, Freddie Mac chief economist. "This led to anticipation that the Fed will reduce overnight interest rates by the end of the year, if not sooner. That expectation, in turn, has created a boon for potential and existing homeowners in the form of lower mortgage rates.
"Additionally, lower rates open the window to homeownership for more first-time homebuyers."
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Source: Freddie Mac