Average weekly rates for fixed-rate mortgages in Freddie Mac’s survey fell from where they were the previous week, ending a period of stability.
The average rate for a 30-year fixed-rate mortgage dropped seven basis points to 4.5% during the week ending Sept. 19. The average 15-year FRM rate declined five basis points to 3.54%.
“Mortgage rates drifted downwards this week amid signs of a weakening economic recovery. Retail sales rose 0.2% in August which was nearly half of July's 0.4% increase,” said Frank Nothaft, vice president and chief economist at Freddie Mac, in his weekly rate report. “In addition, industrial production in August grew 0.4 %, less than the market consensus forecast. And lastly, consumer sentiment fell for the second consecutive month in September to the lowest reading since April.
"This, in part, was why the Federal Reserve chose to maintain its MBS and bond-buying program at its Sept. 12 and 13 monetary policy committee meeting. It also cited the tightening of financial conditions observed in recent months, which in the case of the housing market means the rise in mortgage rates since May,” he said.
Rates for shorter-term mortgages also fell week-to-week in Freddie’s survey, with the average rate for a five-year Treasury-indexed hybrid down 11 basis points from last week at 3.11%, and the average rate for a one-year Treasury-indexed adjustable-rate mortgage down two basis points at 2.65%.
On average in the latest weeks, points for the different loan products were as follows: 0.7 of a point for 30- and 15-year FRMs, 0.5 of a point for five-year Treasury hybrids and 0.4 of a point for one-year Treasury ARMs.
All weekly rate averages remain higher than a year ago, when the 30-year FRM averaged 3.49%, the 15-year FRM averaged 2.77%, the five-year Treasury hybrid averaged 2.76% and the one-year Treasury ARM averaged 2.61%.