Slumping Economy Sinks Mortgage Rates
Freddie Mac released its weekly update on national mortgage rates on Thursday morning, showing average mortgage rates around the country dropping nearly across the board amid signs of a weakening economic recovery.
Thirty-year fixed-rate mortgages (FRMs) dropped 10 basis points over the past week, falling to 4.41%. That's about where they were Dec. 12. Fifteen-year FRMs likewise headed downward, off 11 b.p. at 3.45%. A year ago, 30-year FRMs averaged 3.38% and 15-year FRMs averaged 2.66%.
Among adjustable-rate mortgages (ARMs) over the past week, paths diverged. 5/1 ARMs followed the downwards trend of FRMs, falling five basis points to land at 3.10%. 1-year ARMs, in contrast, remained stuck at 2.56% for the fourth week in a row. A year ago, 5-year ARMs averaged 2.67% and 1-year ARMs averaged 2.57%.
Commenting on the results in a statement, Freddie Mac Vice President and Chief Economist Frank Nothaft attributed the falling rates to "signs of a weakening economic recovery. The economy added 74,000 jobs in December, less than the market consensus forecast." Retail sales growth in December was also a bit light, Nothaft noted. On the bright side, the national unemployment rate did decline to 6.7%. Nothaft noted this is the lowest since October 2008.
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