Thursday, October 1, 2009
Rates on 30-year fixed-rate mortgages for borrowers with good credit fell below 5 percent this week for the first time since May, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey.
But demand for mortgages was down slightly last week, the Mortgage Bankers Association said in another survey.
The 30-year fixed-rate mortgage averaged 4.94 percent with an average 0.7 point, down from 5.04 percent last week and 6.1 percent a year ago, Freddie Mac said. The 30-year fixed-rate last dipped below 5 percent during the week ending May 28, when it averaged 4.91 percent.
The 30-year fixed-rate hit a record low in records dating back to 1971 of 4.78 percent in April, largely because of a Federal Reserve program to purchase up to $1.25 trillion in mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae.
The Fed has announced it will stretch those purchases out through the end of March rather than discontinuing the program at the end of the year as originally planned.
Freddie Mac said rates on 15-year fixed-rate mortgages averaged 4.36 percent this week with an average 0.6 point, down from 4.46 percent last week and 5.78 percent a year ago. That’s the lowest rate since Freddie Mac started tracking 15-year fixed-rate mortgages in 1991.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.42 percent with an average 0.6 point, down from 4.51 percent last week and 6 percent a year ago.
The one-year Treasury-indexed ARM averaged 4.49 percent with an average 0.5 point, down from 4.52 percent last week and 5.12 percent a year ago.
Demand for mortgages fell 2.8 percent last week, driven largely by a 6.2 percent decline in applications for purchase mortages, the Mortgage Bankers Association said in releasing the results of its weekly applications survey.
Demand for refinancings was essentially flat, falling 0.8 percent from the previous week on a seasonally adjusted basis.
Looking back a year, demand for purchase loans was down 10.6 percent, but total loan applications were up 44.3 percent on increased demand for refinancings.
Applications for refinancings accounted for 65.3 percent of applications, up from from 63.8 percent the previous week. Requests for adjustable-rate mortgage (ARM) loans accounted for 6.2 percent of all applications, down from 6.7 percent the previous week, the MBA said.