Economic uncertainty is driving down mortgage rates, according to the latest data released Thursday by Freddie Mac.
The 30-year fixed-rate average dropped to 4.22 percent with an average 0.7 point. It was down from 4.32 percent a week ago but up from 3.36 percent a year ago. After wandering upward for most of the summer, the 30-year fixed rate has fallen each of the past three weeks. It is now at its lowest level since late June.
The 15-year fixed-rate average fell 3.29 percent with an average 0.7 point. It was 3.37 percent a week ago and 2.69 percent a year ago. The 15-year fixed rate has remained above 3 percent since early June.
Hybrid adjustable rate mortgages showed little change. The five-year ARM slid down to 3.03 percent with an average 0.6 point. It was 3.07 percent a week ago and 2.72 percent a year ago. The one-year ARM remained the same as the week before, holding steady at 2.63 percent with an average 0.4 point.
“With the onset of the federal government shutdown and declining consumer confidence, fixed mortgage rates fell for the third consecutive week,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “Consumer sentiment fell for the second month in a row in September to its lowest reading since April, according to the University of Michigan. Moreover, a recent Bloomberg survey of professional forecasters suggests that a partial federal shutdown lasting one week would shave 0.1 percentage points off of GDP growth in the fourth quarter and even more if the shutdown lasts longer.”
After a two-week surge, mortgage applications showed a slight decrease, according to the latest data from the Mortgage Bankers Association.
The Market Composite Index, a measure of total loan application volume, fell 0.4 percent. The Refinance index rose 3 percent, while the Purchase Index dropped 6 percent.
The refinance share of mortgage activity grew to 63 percent, three weeks after sinking to 57 percent, its lowest level since April 2010. Refinances had accounted for more than 80 percent of applications earlier this year.