If you’re in the market for a home or want to refinance an existing mortgage, borrowing costs are extremely favorable so far in the new year, with the 30-year fixed rate sliding to 3.63 percent, its lowest level since the week ending May 23, 2013, Freddie Mac said Thursday.
Average fixed mortgage rates fell again this week following the lead of declining bond yields and the continuation of sliding oil prices. The 30-year fixed-rate is at its lowest level since it averaged 3.59 percent in May 2013.
Financial markets are nervous about the global economy, so investors are placing their money in bonds, long considered a safe haven. In response, bond yields are moving down to very low levels. Mortgage rates are closely tied to yields on long-term government bonds.
The 30-year fixed rate has fallen three weeks in a row. It was 3.66 percent a week ago and 4.39 percent a year ago. Since Nov. 6, the 30-year loan rate has dropped 39 basis points.
“Mortgage rates continued to fall, albeit at a slower pace, with the 30-year fixed rate mortgage averaging 3.63 percent this week,” said Frank Nothaft, vice president and chief economist, Freddie Mac.
“Housing starts picked up in December coming in at a seasonally adjusted 1.089 million unit pace and beating market expectations. Meanwhile, the drop in energy prices pushed the Producer Price Index down 0.3 percent for December and the Consumer Price Index fell 0.4 percent.”
Here is Freddie Mac’s rundown for the week:
30-year fixed-rate mortgage (FRM) averaged 3.63 percent, with an average 0.7 point for the week ending January 22, 2015, down from last week when it averaged 3.66 percent. A year ago at this time, the 30-year FRM averaged 4.39 percent.
15-year FRM this week averaged 2.93 percent, with an average 0.6 point, down from last week when it averaged 2.98 percent. A year ago at this time, the 15-year FRM averaged 3.44 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.83 percent this week, with an average 0.4 point, down from last week when it averaged 2.90 percent. A year ago, the 5-year ARM averaged 3.15 percent.
1-year Treasury-indexed ARM averaged 2.37 percent this week, with an average 0.4 point, unchanged from last week. At this time last year, the 1-year ARM averaged 2.54 percent.