30-Year Rates Dip to 5.32 Percent
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Saturday, July 4, 2009
Rates for 30-year home loans inched downward this week but remain above the record lows posted during the spring, Freddie Mac said Thursday.
The average rate for a 30-year fixed mortgage was 5.32 this week, below last week's average of 5.42 percent.
"We're back to where we were a month ago," said Donald Rissmiller, chief economist at New York-based Strategas Research Partners. "This is almost an ideal report given that rates aren't moving much in either direction, and if you're a policy maker, you'll take that for now."
Last year at this time, the average rate for a 30-year fixed mortgage was 6.35 percent, Freddie Mac said.
Rates on 30-year mortgages fell to a record low of 4.78 percent earlier this year. But then they rose as high as 5.6 percent in June after yields on long-term government debt, which are closely tied to mortgages rates, climbed as investors worried that the huge surplus of government debt hitting the market could trigger inflation.
Since then, the yield on the 10-year Treasury note has fallen back from an eight-month high of 4.01 percent reached in June to 3.51 percent Thursday.
"Lower mortgage rates are helping to support the housing market," said Frank Nothaft, Freddie Mac's chief economist.
Pending home resales increased 0.1 percent in May, following a 7.1 percent rise in April, the National Association of Realtors said earlier this week.
U.S. mortgage applications fell last week by the most since February. The Mortgage Bankers Association's index of applications to purchase a home or refinance a loan dropped 19 percent, to 444.8, in the week ended June 26. Purchase applications declined 4.5 percent, and requests to refinance fell 30 percent.
Freddie Mac collects mortgage rates Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year fixed-rate mortgage fell to 4.77 percent, down from 4.87 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.88 percent, down from 4.99 percent last week. Rates on one-year, adjustable-rate mortgages rose slightly, to 4.94 percent from 4.93 percent.
Borrowers can lower their interest rates by buying "points," which cost 1 percent of the loan value. The nationwide average fee for the loans in Freddie Mac's survey was 0.7 point, except the one-year, adjustable-rate mortgage, which averaged 0.6 point.
