Already low mortgage rates sink further

By Palm Beach Business.com

DELRAY BEACH — Uncertainty over the economy helped push down interest rates over the past week.

Freddie Mac’s Primary Mortgage Market Survey put the average 30-year fixed-rate mortgage at 5.12, down from 5.29 percent a week earlier. The rate comes with an average 0.7 point. A year ago, the 30-year was at 6.47 percent.

Bankrate’s national mortgage survey put the 30-year at 5.52 percent, down from 5.67 percent a week earlier.

"U.S. Treasury bond yields fell nearly a quarter of a percentage point over the week, and other long-term yields followed suit," Freddie Mac Chief Economist Frank Nothaft said. "Interest rates on 30-year and 15-year fixed-rate mortgages fell to the lowest level since the end of May, while initial rates on 5/1 hybrid ARMs declined to levels not seen since January 2005.”

Bankrate said skepticism about the sustainability of an economic rebound with the American consumer ailing led investors to pull money out of stocks and park it in the safety of government bonds. Mortgage rates are closely related to yields on long-term government bonds.

Other results from the Freddie Mac survey:

— The 15-year fixed rate mortgage averaged 4.56 percent, down from last week’s 4.68 percent.

— Five-year adjustable-rate mortgages averaged 4.57 percent this week, down from last week’s 4.75 percent. A year ago, the 5-year ARM averaged 5.99 percent.

— One-year ARMs averaged 4.69 percent this week with an average 0.5 point, down from 4.72 percent a week ago. At this time last year, the 1-year ARM averaged 5.29 percent.

Bankrate found the average 15-year fixed rate mortgage falling to 4.84 percent, while the average jumbo 30-year fixed rate inched lower to 6.44 percent. Adjustable rate mortgages were lower, with the average 1-year ARM dipping to 5.19 percent and the 5-year ARM dropping to 4.86 percent.

The biggest chunk of Bankrate’s panel of mortgage experts, 46 percent, see rates doing little over the near term, while the remaining 54 percent are split down the middle, half seeing rates rising, the other half falling.