30-year fixed rate hits new low for year, spurring refinancings

By Inman News, Thursday, May 19, 2011

Mortgage rates fell for the fifth week in a row as economic uncertainty continues to make bonds that fund most mortgage loans attractive to investors.

Rates on 30-year fixed-rate mortgages hit a new low for the year, averaging 4.61 percent with an average 0.7 point for the week ending May 19, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey.

That’s down from 4.68 percent last week and 4.84 percent a year ago. Rates on 30-year fixed-rate mortgages hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, before climbing to a 2011 high of 5.05 percent in February.

Rates on 15-year fixed-rate mortgages averaged 3.8 percent with an average 0.7 point, down from 3.82 percent last week and 4.24 percent a year ago. Rates on 15-year mortgages hit an all-time low in records dating back to 1991 of 3.57 percent in November.

For 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans, rates averaged 3.48 percent with an average 0.6 point, up 3.41 percent last week but down from 3.91 percent a year ago. The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November.

Rates on 1-year Treasury-indexed ARM averaged 3.15 percent with an average 0.6 point, up from 3.11 percent last week but down from 4 percent a year ago.

Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase loans falling 3.2 percent during the week ending May 13 compared to the week before, and down 1.7 percent from a year ago.

The recent slide in rates has set off another mini-boom in refinancing, with applications to refinance climbing 13.2 percent on a week-to-week basis to their highest level since December.

Requests to refinance accounted for 66.7 percent of all mortgage applications, the largest refinance share since late January.