For the third time in as many weeks, fixed rate mortgages sank to their lowest levels on record, according to the latest data released Thursday by Freddie Mac.
The 30-year fixed rate average continued plummeting to 3.79 percent, down from what was an all-time low of 3.83 percent last week. The 30-year has remained below 4 percent all but one week this year and remain well off its pace from a year ago, when it averaged 4.61 percent.
The 15-year also creeped lower to a new record low of 3.04 percent, down by the slimest of margins from 3.05 percent the week prior. This time last year, the 15-year hovered at 3.80 percent.
Freddie Mac’s vice president and chief economist said that despite encouraging news this week in the United States, the rates were again driven down by the worsening situation in Europe.
“The European debt crisis overshadowed improving economic indicators for the U.S. and allowed Treasury bond yields and fixed mortgage rates to ease for another week,” Frank Nothaft said in a statement. “For instance, industrial production rose 1.1 percent in April — the largest gain since December 2010 — and consumer sentiment in May rose to its highest reading since January 2008.”
He also pointed to signs of progress in the home construction industry, as housing starts increased to an annualized rate of 717,000 homes last month, easily eclipsing most forecasts. The rate of construction on one-family houses also picked up to its fastest pace in three months.
Moreover, according to the latest NAHB/Wells Fargo Housing Market Index, homebuilder confidence in the United States reached its highest reading this month since the start of 2008, also far outpacing economists’ expectations.