Mortgage Rates Mostly Fall This Week; 30-Year Fixed at 5.09%
The Wall Street Journal
Mortgage rates declined this week after a month of gains, with the average rate on 30-year fixed-rate mortgages retreating closer to 5%, according to Freddie Mac’s weekly survey of mortgage rates.
Current rates on fixed-rate mortgages are just about at their average levels for 2009, while adjustable-rate loans are considerably lower. Freddie Mac Chief Economist Frank Nothaft said he expects that to change. “As the economy strengthens further and the Federal Reserve decides to raise its overnight target rate, ARM rates will follow suit because they are typically tied to shorter-term interest rates,” he noted.
The housing market recovery has been shaky. After plummeting during the recession, home prices began to rise in the summer as a tax credit for first-time home buyers spurred sales. Sales of newly built homes have been soft recently while existing-home sales have been strong. But earlier this week, the National Association of Realtors’ index for November pending sales of previously owned homes plunged, largely reflecting a surge of home buyers in October racing to beat the expected deadline for the tax credit.
The 30-year fixed-rate mortgage averaged 5.09% for the week ended Thursday, down from last week’s 5.14% average but up from 5.01% a year ago. Rates on 15-year fixed-rate mortgages were 4.5%, down from 4.54% and 4.62%, respectively.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.44%, flat with the previous week and down from 5.49% a year earlier. One-year Treasury-indexed ARMs were 4.31%, down from 4.33% and 4.95%, respectively.
To obtain the rates, the fixed-rate mortgages required payment of an average 0.7 point and the adjustable-rate mortgages required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.