Mortgage rates slide on Greek debt

By Palm Beach Business.com

south florida mortgage survey chartDELRAY BEACH — The Greek debt crisis has been pounding stocks this week, but it’s also bringing down mortgage rates.

Bankrate’s national mortgage survey found the 30-year fixed mortgage rate falling to 5.12 percent, with an average of 0.47 point, from 5.21 percent a week ago.

Freddie Mac’s Primary Mortgage Market Survey spotted the 30-year fixed-rate mortgage averaging 5.00 percent with an average 0.7 point, down from last week’s 5.06 percent. Last year at this time, the 30-year averaged 4.84 percent.

Palm Beach Business.com’s South Florida Mortgage Survey put the 30-year averaging 4.93 percent with 0.786 point, down from two weeks ago when it averaged 5.09 percent.
Bankrate sees the decline as temporary: The idea that countries an ocean away having trouble repaying their debts could translate into lower mortgage rates here probably sounds pretty Greek to most people.

But when investors get nervous, like they are now, they gravitate to safer investments. Those safer investments are securities issued by the U.S. government, to which mortgage rates are closely related. Whenever the nervousness subsides, mortgage rates will move back up.

The yield on the benchmark 10-year Treasury bond fell to 3.58 percent on Wednesday from 3.80 percent a week earlier. That’s lowest the yield has been since February 5.

"Treasury bond and note yields declined this week, and rates on fixed-rate mortgages and hybrid ARMs followed suit," said Frank Nothaft, Freddie Mac vice president and chief economist. "Rates for both the 30-year and 15-year fixed-rate mortgages were the lowest in six weeks; initial rates on 5/1 hybrid ARMs hit an all-time low since they were added to the survey in the beginning of 2005.”

The Freddie Mac survey put the 15-year at 4.36 percent with an average 0.7 point, down from last week when it averaged 4.39 percent. A year ago at this time, the 15-year FRM averaged 4.51 percent.

Bankrate had the 15-year at 4.49 percent, down from 4.54 percent a week ago.
The 5/1 adjustable rate mortgage sank to 3.97 percent from 4.00 percent a week ago, according to Freddie. Bankrate put it at 4.37 percent.

 

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