Mortgage Rates Drop Further on Slow Economic Growth

By Sari R. Updated on 9/25/2013

Mortgage rates dropped again to new historic lows for the week ending Feb. 2 as economic data revealed weaker than projected growth in the economy.

Freddie Mac, the Virginia-based government-sponsored enterprise (GSE) released its primary mortgage market survey, which shows the average 30-year fixed rate mortgage dropping from 3.98% last week to 3.87%.

During the same period, the 15-year fixed rate mortgage dropped 0.10% from 3.24% 2o 3.14%. The 5-year adjustable rate mortgage (treasury-indexed hybrid) also fell from 2.85% to 2.80%.

There was one loan program that actually rose during this period which is the 1-year ARM.  This rate hit 2.76%, which is up from 2.74% last week, but down from 3.26% the same period last year.

Mortgage rates are at all-time record lows this week because of fourth quarter slower than expected growth in the economy. The GDP rose only 2.8% in the final quarter of 2011, which was below the market consensus forecast of 3%, while consumer spending in December was flat.