Fixed mortgage rates tumble, set new records
Six straight weeks and counting
Fixed mortgage rates tumbled to new all-time record low averages for the sixth straight week, Freddie Mac said in a recent report.
According to Freddie Mac’s Primary Mortgage Market Survey for the week ending June 7, 2012, weak economic data and job data combined to both push mortgage rates down even further and to keep homebuyer affordability high, as a result.
“Fixed mortgage rates reached new record lows for the sixth consecutive week as long-term Treasury bond yields declined further following downwardly revised economic growth and job creation data,” Frank Nothaft, vice president and chief economist at Freddie Mac, said in a statement.
Average rates for 30-year fixed-rate mortgages plummeted to 3.67 percent, down from 3.75 percent the previous week. One year ago at this time, 30-year fixed mortgages averaged 4.49 percent.
In addition, 15-year fixed-rate mortgages fell to an average of 2.94 percent from 2.97 percent the previous week. A year ago, 15-year fixed mortgages averaged 3.68 percent.
Adjustable-rate mortgages (ARMs) didn’t see the same weekly drops but remain lower than a year ago. In the latest data, average rates for 5-year ARMs stayed even at 2.84 percent, while 1-year ARMs rose to 2.79 percent from last week’s 2.75 percent average.
One year ago at this time, 5-year ARMs averaged 3.28 percent, while 1-year ARMs averaged 2.95 percent.
Nothaft specifically mentioned downwardly-revised gross domestic product data, as well as unfavorable jobs and unemployment data as contributing to the negative economic outlook that is contributing to the current low average mortgage rates.
“Gross domestic product rose 1.9 percent in the first quarter, after originally being reported as 2.2 percent, led by gains in inventories, more government cutbacks and the slowest increase in corporate profits in over three years,” Nothaft said.
“In addition, the economy added 69,000 jobs in May, less than half of the market consensus forecast and revisions subtracted a total of 49,000 workers in March and April,” he said. “Lastly, the unemployment rate ticked up from 8.1 percent in April to 8.2 percent.”