Mortgage Rates Are Cooling Down
Freddie Mac released its weekly update on national mortgage rates this morning, showing continued moderation in rates across the board.
Thirty-year fixed rate mortgages (FRM) dropped six basis points over the past week to end at 4.31%. The rate reached a two-year high of 4.51% two weeks ago, and clocked in a year ago at 3.49%.
Fifteen-year FRMs shed two basis points over the past week, falling to 3.39%. Each of the most popular flavors of variable-rate mortgages dropped a basis point apiece, with 5/1 ARMs falling to 3.16%, and one-year adjustables to 2.65%.
Freddie Mac Vice President and Chief Economist Frank Nothaft expressed hope that falling rates will "help to alleviate market concerns of a slowdown in the housing market," noting that "low inventories of homes for purchase are putting upward pressure on house prices." Even if price tags are getting bigger, the belief is that lower interest payments on mortgages to buy them may help to even out the total cost.
While rates remain low by historical standards, they have risen in recent weeks after the Federal Reserve indicated it might slow its bond purchases later this year. The bond purchases have kept long-term interest rates low, encouraging more borrowing and spending.
-- Material from The Associated Press was used in this report.
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