For now, uncertainty as to the firmness of the housing market recovery and questions about the broader economy are keeping housing affordability in a good spot. The result: mortgage rates slide for a fifth straight week.
The Federal Reserve is widely expected to slowly raise short-term interest rates in a year or more. But that seems like an eternity away if you consider the flow of interest rates lately.
Freddie Mac reported this week that the average for the 30-year fixed-rate mortgage is at its lowest point since the week of October 31, 2013.
“Fixed mortgage rates eased a bit for the fifth consecutive week as reports that existing home sales are up 1.3 percent but not as much as expected,” said Frank Nothaft, vice president and chief economist, Freddie Mac.
But overall, reports are mixed, adding to uncertainty.
New home sales rose 6.4 percent in April to a seasonally adjusted annual rate of 433,000, which followed an upward revision of 11,000 units for the prior two months.
Additionally, The Conference Board reported that confidence among consumers rose in May after dipping in April. Meanwhile, the S&P/Case-Shiller 20-city composite index, measuring home prices, rose 0.9 percent in March, above the consensus forecast.
Rising home prices in some areas, however, are keeping first-time buyers with limited income or credit out of the market as inventories are squeezed.
Here is Freddie Mac’s overview on interest rates:
30-year fixed-rate mortgage (FRM) averaged 4.12 percent, with an average 0.6 point for the week ending May 29, 2014, down from last week when it averaged 4.14 percent. A year ago at this time, the 30-year FRM averaged 3.81 percent.
15-year FRM this week averaged 3.21 percent, with an average 0.5 point, down from last week when it averaged 3.25 percent. A year ago at this time, the 15-year FRM averaged 2.98 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.96 percent this week, with an average 0.3 point, unchanged from last week. A year ago, the 5-year ARM averaged 2.66 percent.
1-year Treasury-indexed ARM averaged 2.41 percent this week, with an average 0.4 point, down from last week when it averaged 2.43 percent. At this time last year, the 1-year ARM averaged 2.54 percent.