Average fixed mortgage rates reversed course from the previous week and headed lower in Freddie Mac’s most recent weekly survey, with the 30-year dropping nine basis points to 3.54% and origination projections for the year increasing slightly to $1.75 billion from $1.7 billion.
“Annual growth in the consumer price index has remained at or below 2% for the past four months, and for the producer price index even lower,” Frank Nothaft, vice president and chief economist at Freddie Mac, said in his weekly rate report Thursday. “This, in part, is why the Federal Reserve monetary policy committee on March 20th lowered the upper end of its inflation forecast for 2013. In addition, our March outlook calls for 30-year fixed mortgage rates to remain below 4% throughout this year."
“With modest growth and stubbornly high unemployment, long term interest rates, such as for the 30-year fixed-rate mortgage, will only gradually creep up and likely remain below 4% throughout 2013,” Nothaft forecasted in his monthly economic outlook Wednesday.
Thirty-year loans averaged 0.8 point for the week ending March 21. A year ago, the 30-year FRM averaged 4.08%.
The 15-year FRM in the most recent week averaged 2.72% with an average 0.7 point, down from 2.79%. A year ago, the 15-year FRM averaged 3.30%.
The rate for five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.61% in the most recent week with an average 0.6 point, the same as the previous week. A year ago, the five-year hybrid ARM averaged 2.96%.
The one-year Treasury-indexed ARM averaged 2.63% during the week ending March 21 with an average 0.4 point, down from 2.64%. At this time a year ago, the one-year ARM averaged 2.84%.