Bankrate, Freddie Mac: Mortgage rates sink to record lows

By Palm Beach Business.com

DELRAY BEACH — Mortgage rates continue to fall. And fall and fall. They’ve fallen so much, in fact, that they’ve set record lows, according to both Freddie Mac and Bankrate.

Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed-rate mortgage at 4.69 percent with an average 0.7, down from last week’s 4.75 percent. A year ago, the 30-year averaged 5.42 percent.

The Bankrate survey put the 30-year at 4.81 percent with 0.44 points, down from 4.88 percent a week ago.

Palm Beach Business.com’s South Florida Mortgage Survey found the 30-year averaging 4.64 percent with 0.75 point, down from 4.76 percent two weeks ago. BankAtlantic offered a 30-year at 4.48 percent with 1 point.

Bankrate cited a run of disappointing economic news – from housing, to jobs, to consumer spending – as the force keeping mortgage low. That’s made Treasury bonds and bills more attractive to investors, which in turn, has pushed yields down. Mortgage rates are closely tied to Treasury yields, particularly the 10-year bond, which dropped nearly a full point over the last couple of months.

“Mortgage rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the homebuyer tax credit,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Both new and existing home sales showed unexpected declines in May. Existing sales fell 2.2 percent, compared to the market consensus forecast of a 6.0 percent gain, based on figures published by the National Association of Realtors® . Sales of new homes fell 32.7 percent to an annualized rate of 300,000 units, which was the largest monthly drop and slowest pace since records began in 1963, according to the Census Bureau .”

Other rates from the two major surveys: Freddie Mac put the  15-year averaging 4.13 percent with an average 0.6 point, down from last week’s 4.20 percent. Bankrate put the 15-year at 4.13 percent with 0.42 point, down from 4.19 percent a week ago.

The 5-year adjustable-rate mortgage averaged 3.84 percent this week with 0.7 point, down from last week when it averaged 3.89 percent, according to Freddie Mac.

In the Bankrate survey, the 5-year hit 4.13 percent with 0.36 point, down from 4.19 percent a week ago.

Surveyed banks: PNC, Bankatlantic, Bank of America, Chase, Citibank, TD Bank, Wachovia, Suntrust.