Fixed Mortgage Rates Ease Going Into The Labor Day Weekend
August 30, 2012
Fixed mortgage rates pulled back and followed bond yields lower after gradually moving higher over the past month, according to the latest Freddie Mac Primary Mortgage Market Survey.
The 30-year fixed-rate mortgage (FRM) averaged 3.59 percent with an average 0.6 point for the week ending Aug. 30, down from last week when it averaged 3.66 percent. Last year at this time, the 30-year FRM averaged 4.22 percent.
Treasury bond yields fell, allowing mortgage rates to follow, after the release of the July 31 and Aug. 1 minutes of the Federal Reserve's monetary policy committee.
“Committee members agreed that economic activity had decelerated more in recent months than they had anticipated at their last meeting in June,” said Frank Nothaft, vice president and chief economist for Freddie Mac.”
Despite this, the housing market continued to show improvement over the past few months. New home sales rose 3.6 percent in July matching May's pace as the strongest month since April 2010.
“Similarly, pending existing home sales also rose in July to its highest rate since April 2010,” Nofhaft added. “And, the S&P/Case-Shiller National Home Price Index rose 1.2 percent between the second quarter of 2011 and 2012, reflecting the first annual increase since the second quarter of 2010."
Meanwhile, the 15-year FRM this week averaged 2.86 percent with an average 0.6 point, down from last week when it averaged 2.89 percent. A year ago at this time, the 15-year FRM averaged 3.39 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.78 percent this week with an average 0.6 point, down from last week when it averaged 2.80 percent. A year ago, the 5-year ARM averaged 2.96 percent.
The 1-year Treasury-indexed ARM averaged 2.63 percent this week with an average 0.4 point, down from last week when it averaged 2.66 percent. At this time last year, the 1-year ARM averaged 2.89 percent.