Mortgage rates plummet to four-month lows

October 24, 2013

(Win McNamee/Getty Images)

Mortgage rates plummeted to four-month lows this week, according to the latest data released Thursday by Freddie Mac.

The 30-year fixed-rate average sank to 4.13 percent with an average 0.8 point. It was down from 4.28 percent a week ago, but up from 3.41 percent a year ago. The 30-year fixed rate, which spiked to 4.58 percent in August, has fallen four of the past six weeks. It hasn’t been this low since late June, when it was below 4 percent.

The 15-year fixed-rate average dropped to 3.24 percent with an average 0.6 point. It was 3.33 percent a week ago and 2.72 percent a year ago. The 15-year fixed rate, which reached its highest level in August, at 3.6 percent, has remained above 3 percent since early June.

(Pam Tobey/The Washington Post)
(Pam Tobey/The Washington Post)

Hybrid adjustable rate mortgages were also down. The five-year ARM fell to 3 percent with an average 0.4 point. It was 3.07 percent a week ago and 2.75 percent a year ago.

The one-year ARM slid to 2.6 percent with an average 0.5 point. It was 2.63 percent a week ago.

“Mortgage rates slid this week as the partial government shutdown led to market speculation that the Federal Reserve will not alter its bond purchases this year,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “The weak employment report for September added to this expectation. The economy added just 148,000 jobs, which was below the market consensus forecast and less than the 193,000 jobs increase in August.”

Meanwhile, 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 0.6 percent. The Refinance index dropped 1 percent, while the Purchase Index increased 1 percent.

The refinance share of mortgage activity declined to 65 percent, a month after sinking to 57 percent, its lowest level since April 2010. Refinances had accounted for more than 80 percent of applications earlier this year.

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