Mortgage rates dropped for the third week in a row, according to the latest data released by Freddie Mac.
The 30-year fixed-rate average fell to 3.41 percent with an average 0.7 point. It was down from 3.43 percent a week ago and 3.9 percent a year ago. Before tumbling below 3.5 percent last week for the first time since Jan. 24, the 30-year fixed rate had hovered around 3.5 percent.
The 15-year fixed-rate average sank to 2.64 percent with an average 0.7 point. It was down from 2.65 percent a week ago and 3.13 percent a year ago. The 15-year fixed rate hit its lowest level since Jan. 3 and has remained below 3 percent for nearly a year.
Hybrid adjustable-rate mortgages were mixed. The five-year ARM went down to 2.6 percent with an average 0.5 point. It was 2.62 percent a week ago. The one-year ARM edged up to 2.63 percent with an average 0.4 point. It was 2.62 percent a week ago.
According to Frank E. Nothaft, Freddie Mac vice president and chief economist, weak consumer spending drove interest rates down.
“Retail sales contracted for the second time in three months, falling 0.4 percent in March,” Nothaft said in a statement. “In addition, the University of Michigan reported their Consumer Sentiment Index dropped 6.3 points in April to settle at 72.3, its lowest level since July. The April reading snapped a streak of three consecutive gains.”
Three weeks of declines in interest rates has led to an uptick in mortgage applications, according to the Mortgage Bankers Association.
The Market Composite Index, a measure of loan application volume, rose 4.8 percent from the previous week. The Refinance Index climbed 5 percent to its highest level since mid-January. The Purchase Index increased 4 percent to its highest level in two years.
The refinance share of mortgage activity remained unchanged from the previous week, accounting for 75 percent of total applications.