Thanks to an ailing U.S. economy and trouble in overseas markets, rates offered on 30-year fixed-rate mortgages fell to a new yearly low this week, 4.39%, according to figures compiled by Freddie Mac.
But although FRMs are at a low for the year, rates are still above the historical lows established in October 2010 when a 30-year fixed-rate mortgage could be had at 4.23% with 0.8 points.
Meanwhile, the recent decline in rates – coupled with the debt crisis ending – is causing the telephones to ring more at certain lending shops. Marc Savitt, president of The Mortgage Center, Martinsburg, W. Va., said the other day that lower rates are spurring refinancing inquiries at his company.
Thursday morning, Freddie noted that although FRMs have not yet reached their historic lows, other loan types have. The 15-year fixed, and 5-year ARM set new lows this week, averaging 3.54%, and 3.18%, respectively.
“The economy grew 1.3 percent in the second quarter, which was below the market consensus forecast, and first quarter growth was cut to less than a quarter of what was originally reported,” noted Freddie chief economist Frank Nothaft. “The first half of this year was the worst six-month period since the economic recovery began in June 2009.”
The biggest stumbling block to the housing/mortgage market reviving is the weak employment picture. On Friday, the U.S. Department of Labor will release its employment report for July.
