Amidst the continued weak economy, mortgage rates have dropped for four weeks in a row to their lowest point this year, according to Freddie Mac’s Primary Mortgage Market Survey that was released on June 2, 2011.
Rates on 30-year fixed-rate mortgages averaged 4.55 percent with an average 0.6 point for the week ending June 2, down from 4.71 percent last week and 5 percent a year ago.
The 30-year fixed-rate mortgage hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, and so far this year has ranged from 4.71 percent in early January to a high of 5.05 percent in February.
Rates on 15-year fixed-rate mortgages averaged 3.74 percent with an average 0.7 point, down from 3.89 percent last week and 4.36 percent a year ago. This is a new low for 2011, but it is well above the all-time low in records dating back to 1991 of 3.57 percent, set in November.
Rates on 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 3.41 percent with an average 0.6 point, down from 3.47 percent last week and 3.97 percent a year ago. The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November.
Rates on the 1-year ARM loans averaged 3.13 percent with an average 0.6 point, down from 3.14 percent last week and 4.07 percent a year ago.
Some analysts are anticipating an upward movement in mortgage rates. Mortgage applications have been rising, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. Also, the number of borrowers looking to refinance is currently at its highest level since the second week of December. Mirroring the steady decline in rates, refinancing activities have increased 35 percent over the past seven weeks. However, refinancing is only at 50 percent the level it reached during the fall of 2010, when mortgage rates fell to their record lows.
Despite an uptick in refinance activities, the low mortgage rates haven’t been good enough to nudge the weak housing market. According to the National Association of Realtors, fewer people bought previously occupied homes in April. Sales fell to a seasonally adjusted annual rate of 5.05 million units, which is far below the 6 million homes a year that economists consider a healthy housing market.
Despite the lackluster housing news, Freddie Mac’s Vice President and Chief Economist Frank Nothaft highlighted one positive observation. "Households have been strengthening their balance sheets over the past year," he said. "The New York Federal Reserve Bank reported that the serious delinquency rate (90 or more days delinquent plus foreclosures) on first mortgages and closed-end home equity loans balances fell to 7.46% in the first quarter from a peak of 8.89% the same period last year. This suggests there may be fewer distressed sales later this year." Distressed houses have accounted for a much higher than normal share of all homes on the market for the last year, and a reduction in their number would help stabilize home prices, which have been falling since last summer.
Rates on 30-year fixed-rate mortgages averaged 4.55 percent with an average 0.6 point for the week ending June 2, down from 4.71 percent last week and 5 percent a year ago.
The 30-year fixed-rate mortgage hit an all-time low in Freddie Mac records dating to 1971 of 4.17 percent during the week ending Nov. 11, 2010, and so far this year has ranged from 4.71 percent in early January to a high of 5.05 percent in February.
Rates on 15-year fixed-rate mortgages averaged 3.74 percent with an average 0.7 point, down from 3.89 percent last week and 4.36 percent a year ago. This is a new low for 2011, but it is well above the all-time low in records dating back to 1991 of 3.57 percent, set in November.
Rates on 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 3.41 percent with an average 0.6 point, down from 3.47 percent last week and 3.97 percent a year ago. The 5-year ARM hit a low in records dating to 2005 of 3.25 percent in November.
Rates on the 1-year ARM loans averaged 3.13 percent with an average 0.6 point, down from 3.14 percent last week and 4.07 percent a year ago.
Some analysts are anticipating an upward movement in mortgage rates. Mortgage applications have been rising, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. Also, the number of borrowers looking to refinance is currently at its highest level since the second week of December. Mirroring the steady decline in rates, refinancing activities have increased 35 percent over the past seven weeks. However, refinancing is only at 50 percent the level it reached during the fall of 2010, when mortgage rates fell to their record lows.
Despite an uptick in refinance activities, the low mortgage rates haven’t been good enough to nudge the weak housing market. According to the National Association of Realtors, fewer people bought previously occupied homes in April. Sales fell to a seasonally adjusted annual rate of 5.05 million units, which is far below the 6 million homes a year that economists consider a healthy housing market.
Despite the lackluster housing news, Freddie Mac’s Vice President and Chief Economist Frank Nothaft highlighted one positive observation. "Households have been strengthening their balance sheets over the past year," he said. "The New York Federal Reserve Bank reported that the serious delinquency rate (90 or more days delinquent plus foreclosures) on first mortgages and closed-end home equity loans balances fell to 7.46% in the first quarter from a peak of 8.89% the same period last year. This suggests there may be fewer distressed sales later this year." Distressed houses have accounted for a much higher than normal share of all homes on the market for the last year, and a reduction in their number would help stabilize home prices, which have been falling since last summer.
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