It’s hardly a surprise anymore, but mortgage rates fell to yet another all-time low this week—3.49% for a 30-year fixed-rate mortgage, according to new figures compiled by Freddie Mac.
Freddie reported that rates on 30-year FRMs fell four basis points compared to the week prior but are down 100 bps when measured against the same week last year. The 15-year FRM rate fell three basis points to 2.8%.
"Market concerns over the strength of the economic recovery brought long-term Treasury yields to new lows this week allowing fixed mortgage rates to reach record levels,” said Freddie chief economist Frank Nothaft. (The cut-off date for the measurement is July 26.)
Rates for adjustable-rate mortgage products bucked the downward trend with the 5/1 ARM rate rising five basis points to 2.74%. The one-year Treasury-indexed ARM rose two basis points to 2.71%.
In other housing related news, the National Association of Realtors’ leading indicator of future home sales slipped 1.4% in June from May, adding another bit of disappointing news about the housing recovery. NAR reported Thursday that its pending sales index fell to 99.3 in June from 100.7 in May.
The May PSI figure was revised downward and NAR economists trimmed their forecast for existing-home sales this year to 4.62 million sales from 4.66 million.
NAR chief economist Lawrence Yun insists buyer demand is strong, but the supply of homes for sale is tight—particularly in the lower price range that is popular with first-time buyers and REO investors.
“Any bank-owned properties that have been held back in markets with inventory shortages should be released expeditiously to help meet market demand,” Yun said. “Housing starts will likely need to double over the next two years to satisfy the pent-up demand for both rentals and ownership.”
NAR's pending sales index is based on signed contracts, which usually translate into actual sales in a month or two. An index figure of 100 is equal to contract activity during 200.
