Mortgage Rates Continue to Decline

By Stevie Duffin Updated on 12/14/2012

By Daniel Duffield

In the midst of concerns over the possibility of economic recovery, both 15-year and 30-year mortgage rates continued to plummet, reaching incredible lows.

A survey from Freddie Mac revealed that 30-year FRM averaged 3.49% this week, hitting a record low from last week’s 3.53%. At this time last year, the 30-year FRM averaged 1.06% higher at 4.55%.

In terms of the 15-year FRM, the rates set another record at 2.8%, compared with last week’s 2.83%. The previous year, the 15-year FRM averaged 0.86% higher at 3.66%.

Five-year, Treasury-indexed, hybrid adjustable-rate mortgages rose this week to 2.74% from last week’s rate of 2.69%, both considerably lower than a year earlier, recorded at 3.25%.

For the one-year, Treasury-indexed ARM, rates averaged 2.71%, increasing from 2.69% in the previous week, reduced from last year’s 2.95%.

“The Conference Board Leading Economic Index showed the largest monthly decline in June since September 2011,” said Freddie Mac Chief Economist Frank Nothaft. “Existing home sales fell to 4.36 million homes (annualized) in June and represented the slowest pace since October 2011. Similarly, new home sales fell in June to their lowest level since January of this year.”

A survey of banks reported that the 30-year FRM decreased to 3.75% from 3.78%, with 15-year FRM rates falling from 3.04% to 3%. The 5/1 ARM kept at 2.89%.

The Federal Housing Finance Agency reported that mortgage rates concerning previously occupied homes fell to 3.67% in June, down from 3.78% in May. In terms of the general rating for all mortgages, fixed and adjustable, rates averaged 3.67%, dropping from the previous month’s 3.78%.

For 30-year FRM loans on $417,000 or less, the average interest rate fell to 3.88%, decreasing 16 basis points in June according to the FHFA. These rates reflect loans closed between June 25 and 30, calculated for, the organization’s monthly interest rate survey of purchase-money mortgages.