Mortgage rates continue to fall
The average rate on 30-year fixed mortgages slipped to 4.87 percent from 4.95 percent this week, according to Freddie Mac.
Mortgage rates tend to track the yield on the 10-year Treasury note. Investors are putting more money into Treasurys, concerned that the Libyan uprising will keep oil prices above $100 a barrel and hurt consumer spending. That has lowered those yields.
The average rate on the 15-year fixed home loan fell to 4.15 percent from 4.22 percent, Freddie Mac said. The average rate on a five-year adjustable-rate mortgage fell to 3.72 percent from 3.80 percent, and the average rate on one-year adjustable-rate home loans edged up to 3.23 percent from 3.40 percent.
The rate for a 30-year fixed loan reached an eight-month high of 5.05 percent in February. The decline since then has lowered the monthly payment for a $300,000 mortgage to about $1,587 from $1,620.
"Mortgage rates saw an overall improvement this week," Frank Nothaft, vice president and chief economist of Freddie Mac, said in a statement. "However, housing demand still remains weak."
The number of people signing contracts to buy previously owned homes dropped 2.8 percent in January, according to the National Association of Realtors. December contracts were revised to a 3.2 percent decline after the group initially reported a gain.
Mortgage applications fell 6.5 percent, according to a Mortgage Bankers Association's index, which covers about half of all U.S. retail residential-mortgage originations. The MBA's purchase index decreased 6.1 percent and its refinancing gauge declined 6.5 percent.
Freddie Mac's rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan and 15-year fixed loan in Freddie Mac's survey was 0.7 point. The average fee for the five-year ARM and the 1-year ARM was 0.6 point.
- From news services