Without any further adieu, I, Eric Mally, am happy to say that according to Freddie Mac’s weekly Primary Mortgage Market Survey, the streak of mortgage rates rising is now over.
That’s right, people. Mortgage rates fell over the course of the week and all is right with the world.
Well, maybe not all is right with the world. We have the whole Hurricane Isaac situation (which I think would be an appropriate nickname for my fellow team member’s son), the normal political situation across the country, and my dog has an ear infection.
But at least mortgage rates dropped, right? Let’s take a look at the numbers.
30-year fixed-rate mortgages dropped to 3.59% with 0.6 points from last week’s 3.66% with 0.7 points. This snaps a four-week long streak of rising and rights the mortgage rate ship. Also, this is the lowest average for a 30-year fixed rate in three weeks. Last year at this time, 30-year fixed-rate mortgages averaged 4.22%.
15-year fixed-rate mortgages also fell this week, slipping from last week’s 2.89% with 0.7 points to 2.86% with 0.6 points this week. It seems to me that 15-year fixed rates have found their home below the 3.00% line, considering they haven’t topped above that mark since May 24. Last year, 15-year fixed-rate mortgages averaged 3.39%.
ARMs saw their fixed-rate cohorts taking nosedives and decided to join the party this week as well. 5/1-year ARMs fell to 2.78% with 0.6 points this week from last week’s 2.80% with 0.6 points, and 1-year ARMs fell to 2.63% with 0.4 points from last week’s 2.66% with 0.4 points.
12 months ago, 5/1-year ARMs and 1-year ARMs averaged 2.96% and 2.89%, respectively.
Our good friend Frank Nothaft, chief economist and vice president of Freddie Mac, gave us the ol’ “Franky Two-for-One Special” this week with his delightful insight.
He started off by saying, “Treasury bond yields fell, allowing mortgage rates to follow, after the release of the July 31 and August 1 minutes of the Federal Reserve’s monetary policy committee. Committee members agreed that economic activity had decelerated more in recent months than they had anticipated at their last meeting in June. Some members even saw room for additional stimulus fairly soon if needed.”
Basically, treasury bond yields falling = good news for mortgage rates.
He continued, “Nonetheless, the housing market continued to show improvement over the past few months. New home sales rose 3.6% in July matching May’s pace as the strongest month Since April 2010. Similarly, pending existing home sales also rose in July to its highest rate since April 2010. And, the S&P/Case-Shiller National Home Price Index rose 1.2% between the second quarter of 2011 and 2012, reflecting the first annual increase since the second quarter of 2010.”
There you have it. Rates dropped, but now is still the time to lock in or refinance before they go up again. They can jump any day, so get it while the gettin’ is good!