Mortgage rates generally fell again this week, with the average
rate on 30-year fixed-rate mortgages retreating closer to 5%,
according to Freddie Mac's (FRE) weekly survey of mortgage
rates.
After yields on Treasurys rebounded from multi-decade lows
during the spring and early summer - bringing mortgages rates along
with them - Treasurys have rallied of late as investors question
the pace of an economic recovery.
National Association of Realtors data last week showed that
pending home sales climbed to the highest level in more than two
years, while new-home sales having climbed five in the latest seven
months. Indeed, Frank Nothaft, Freddie chief economist, said
Thursday the low rates contributed to a 17% jump in mortgage
applications over the previous week, as refinancing demand jumped
23%.
The 30-year fixed-rate mortgage averaged 5.07% for the week
ended Thursday, down from last week's 5.08% average and 5.93% a
year ago. Rates on 15-year fixed-rate mortgages were 4.5%, down
from 4.54% last week and 5.54% a year earlier.
Five-year Treasury-indexed hybrid adjustable-rate mortgages
averaged 4.51%, down from last week's 4.59% and 5.87% a year
earlier. One-year Treasury-indexed ARMs were 4.64%, up from 4.62%
last week but down from 5.21% a year earlier.
To obtain the rates, the fixed-rate mortgages required payment
of an average 0.7 point. The five-year adjustable-rate mortgages
requred an average 0.5 point and the one-year ARMs, an average 0.6
point. A point is 1% of the mortgage amount, charged as prepaid
interest.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com