Average 30-Year-Mortage Rates Hit Six-Week Low at 5.2 Percent
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Saturday, July 11, 2009
Average rates for 30-year mortgages fell for the second consecutive week to the lowest level in six weeks but remained above record lows reached earlier this year, Freddie Mac said Thursday.
The average rate for a 30-year, fixed-rate home loan was 5.2 percent this week, down from 5.32 percent last week, Freddie Mac said. At this time last year, the average rate for a 30-year fixed mortgage averaged 6.37 percent.
Rates on 30-year mortgages fell to a record low of 4.78 percent earlier this year, spurring refinancings. But they then 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 3.38 percent on Thursday.
Frank Nothaft, Freddie Mac's chief economist, said the weekly drop occurred as investors worried about a weakening labor market.
"The weak employment situation coupled with declining home values in many markets has added to greater defaults on home-equity loans and lines of credit," Nothaft added.
The American Bankers Association reported that the number of home-equity loans that were 30 days or more delinquent rose to a record high of 3.52 percent in the first quarter, Nothaft said.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
This week, the average rate on a 15-year, fixed-rate mortgage fell to 4.69 percent, down from 4.77 percent last week, according to Freddie Mac.
Average rates on five-year, adjustable-rate mortgages were 4.82 percent, down from 4.88 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.82 percent from 4.94 percent.
Borrowers can lower their rates by buying "points," which cost 1 percent of the loan value. The nationwide average for 30-year and 15-year, fixed-rate mortgages was 0.7 point, while five-year and one-year adjustable-rate mortgages averaged 0.6 point.
The Mortgage Bankers Association's index of applications to purchase a home or refinance a loan rose 11 percent, to 493.1, in the week ended July 3. Purchase applications rose 6.7 percent, and requests to refinance increased 15 percent.
