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European uncertainty drives mortgage rates to record lows

By Palm Beach Business.com

DELRAY BEACH — Not surprising given what’s happened to stocks over the past week, but mortgage rates hit yet another record low, according to both Freddie Mac and Bankrate.

Freddie Mac’s Primary Mortgage Market Survey, released Thursday, found the 30-year fixed-rate mortgage averaging 3.79 percent with 0.7 point, down from 3.83 percent a week ago. A year ago, the 30-year averaged 4.61 percent, according to Freddie.

Bankrate’s national mortgage survey, also released Thursday, dropped below 4.0 percent for the first time, to 3.97 percent with 0.44 point from 4.02 percent a week ago.

Not surprisingly, mortgage experts cite the European debt crisis and the force driving down rates. Mortgage rates generally move with yields on long-term Treasury notes, which tend to fall in times of economic uncertainty.

"The European debt crisis overshadowed improving economic indicators for the U.S. and allowed Treasury bond yields and fixed mortgage rates to ease for another week,” Freddie Mac Chief Economist Frank Nothaft said. “For instance, industrial production rose 1.1 percent in April — the largest gain since December 2010 — and consumer sentiment in May rose to its highest reading since January 2008, according to the University of Michigan.”

Also from the surveys, the 15-year fixed-rate dropped to 3.04 percent with 0.7 point in the Freddie Mac survey and was flat at 3.20 percent with 0.40 point, according to Bankrate.

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