Mortgage rates sank to new lows this week as fears about a U.S. economic slowdown and the impact of the European debt crisis continue to make Treasuries and bonds that fund most mortgages look like safe bets to investors.
Rates on 30-year fixed-rate mortgage (FRM) averaged 3.62 percent with an average 0.8 point for the week ending July 5, down from 3.66 percent last week and 4.60 percent a year ago, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey. That’s a new all-time low in Freddie Mac records dating to 1971.
For 15-year fixed-rate mortgages, rates averaged 2.89 percent with an average 0.7 point, down from 2.94 percent last week and 3.75 percent a year ago. That’s also an all-time low in records dating to 1991.
Rates on 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.79 percent, with an average 0.6 point, unchanged from last week but down from 3.30 percent a year ago. Rates on five-year ARM loans hit an all-time low in records dating to 2005 of 2.77 percent during the week ending June 21.
For 1-year Treasury-indexed ARMs, rates averaged 2.68 percent with an average 0.5 point, down from 2.74 percent last week and 3.01 percent a year ago. That’s a new all-time low in records dating to 1984.
“Recent economic data releases of less consumer spending and a contraction in the manufacturing industry drove long-term Treasury bond yields lower over the week and allowed fixed mortgage rates to hit new all-time record lows,” said Freddie Mac’s chief economist, Frank Nothaft, in a statement.