Mortgage Rates Hit All-time Record Lows on Signs of Weak Economy
Average fixed mortgage rates fell to new all-time record lows for the second consecutive week on mortgage securities purchases by the Federal Reserve and indicators of a weakening economy, according to the latest Freddie Mac Primary Mortgage Market Survey® (PMMS®).
The Federal Reserve’s purchase of long-term fixed mortgage securities allowed the 15-year fixed-rate mortgage at 2.69 percent to fall below the 5-year ARM’s rate at 2.72 percent. The last time the average 15-year fixed was lower than the 5-year ARM was the week ending October 15, 2009.
30-year fixed-rate mortgage (FRM) averaged 3.36 percent with an average 0.6 point for the week ending October 4, 2012, down from last week when it averaged 3.40 percent. Last year at this time, the 30-year FRM averaged 3.94 percent.
15-year FRM this week averaged 2.69 percent with an average 0.5 point, down from last week when it averaged 2.73 percent. A year ago at this time, the 15-year FRM averaged 3.26 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.72 percent this week with an average 0.6 point, up from last week when it averaged 2.71 percent. A year ago, the 5-year ARM averaged 2.96 percent.
1-year Treasury-indexed ARM averaged 2.57 percent this week with an average 0.4 point, down from last week when it averaged 2.60 percent. last week. At this time last year, the 1-year ARM averaged 2.95 percent.
According to Frank Nothaft, vice president and chief economist for Freddie Mac, the final estimate of growth in Gross Domestic Product was revised down to 1.3 percent in the second quarter, representing the slowest growth in a year. In addition, personal incomes rose only 0.1 percent in August, while July’s increase was revised downward. And finally, pending home sales in August fell 2.6 percent, well below the market consensus forecast of a slight increase.
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