Continuing economic uncertainty contributed to fixed-rate mortgages falling to their lowest interest rate levels ever, according to the latest Freddie Mac Primary Mortgage Market Survey.
The 30-year FRM fell 10 basis points from last week, to 4.12% with an average 0.7 point, while the 15-year FRM was down 6 basis points to 3.33% with an average 0.6 point.
The one-year Treasury-indexed adjustable-rate mortgage also reached an all-time low, down 5 basis points to 2.84%, with an average 0.6 point. All three had their previous lows in the survey for the week of Aug. 18.
The five-year Treasury-indexed hybrid ARM was unchanged from 2.96% from last week, matching its all-time low.
Frank Nothaft, Freddie Mac chief economist, commented, "Market concerns over Eurozone sovereign debt default and a weak U.S. employment report for August placed downward pressure on Treasury bond yields and allowed fixed mortgage rates to hit new lows this week. On net, the economy added no new jobs last month and was the weakest reading since September 2010. Meanwhile, the unemployment rate remained at 9.1%, marking its 31st consecutive month of being above 8%, the longest such stretch in 70 years.
"The Federal Reserve painted a bleaker picture as well in its Sept. 7th regional economic review. Seven of its 12 districts reported more subdued views of business conditions. Many of the Fed's manufacturing contacts downgraded or became more cautious about their near-term outlooks due to increased economic uncertainty."
