Fixed Mortgage Rates Enter 7th Month Below 5%; New Lows for ARMs

Mortgage loan applicationsLong-term mortgage rates remained flat this week, but entered a 7th consecutive month below 5 percent – while short-term adjustable rates continued to set new lows, according to Freddie Mac.
 The most popular mortgage, the 30-year fixed-rate, averaged 4.24 percent this week, up slightly from last week when it averaged 4.23 percent.  Last year at this time, the 30-year FRM averaged 4.98 percent.
The 30-year set a new low last month of 4.19 percent, according to Freddie Mac’s records dating back to 1970.
The 15-year fixed rate this week averaged 3.63 percent, down from last week when it averaged 3.66 percent. A year ago at this time, the 15-year FRM averaged 4.40 percent.
The 5-year Treasury-indexed hybrid ARM (adjustable-rate mortgage) averaged 3.39 percent this week, down from last week when it averaged 3.41 percent. A year ago, the 5-year ARM averaged 4.35 percent. The 5-year ARM has not been lower since Freddie Mac started tracking it in January 2005.
The1-year Treasury-indexed ARM averaged 3.26 percent this week, down from last week when it averaged 3.30 percent. At this time last year, the 1-year ARM averaged 4.47 percent. The 1-year ARM set another Freddie Mac survey low this week.
“With little sign of inflation to push up long-term interest rates, fixed mortgage rates held relatively steady this week, while ARM rates hit new all-time record lows,” said Frank Nothaft, Freddie Mac vice president and chief economist.
Despite seeing below-5 percent fixed rates for more than 6 months, mortgage applications for refinancing remain sluggish. The Mortgage Bankers Association yesterday reported a 6.4 percent decrease last week in its index that measures mortgage refinancing applications, compared to the previous week.
Its index for mortgage applications for the purchase of a home was flat, registering a 1.4 percent increase last week, compared to the previous week.

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