Mortgage Rates Hit Record Lows Amid Signs of Weakening Economy
|August 4, 2011|
Mortgage rates dropped sharply amid falling bond yields and signs of a weaker than expected economy.
According to the latest Freddie Mac Primary Mortgage Market Survey, the 30-year fixed-rate mortgage hit its lowest level for 2011 as it averaged 4.39 percent with an average 0.8 point for the week ending Aug. 4, down from last week when it averaged 4.55 percent. Last year at this time, the 30-year FRM averaged 4.49 percent.
Meanwhile, 15-year FRM averaged 3.54 percent with an average 0.7 point, down from last week when it also averaged 3.66 percent. A year ago at this time, the 15-year FRM averaged 3.95 percent.
"Treasury bond yields fell markedly after signs the economy was weaker than what markets had previously thought allowing fixed mortgage rates to follow this week with the 15-year fixed and 5-year ARM setting new historical lows,” said Frank Nothaft, vice president and chief economist for Freddie Mac. “The economy grew 1.3 percent in the second quarter, which was below the market consensus forecast, and first quarter growth was cut to less than a quarter of what was originally reported. In fact, the first half of this year was the worst six-month period since the economic recovery began in June 2009. Moreover, consumer spending fell 0.2 percent in June, representing the first decline since September 2009.”
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.18 percent with an average 0.6 point, down from last week when it averaged 3.25 percent. A year ago, the 5-year ARM averaged 3.63 percent.
The 1-year Treasury-indexed ARM averaged 3.02 percent with an average 0.5 point, up from last week when it averaged 2.95 percent. At this time last year, the 1-year ARM averaged 3.55 percent.