Freddie Mac is the latest group tracking loan prices to report that rates on 30-year fixed-rate mortgages have fallen below the 6 percent threshold.
The McLean, Va.-based mortgage repurchaser’s weekly Primary Mortgage Market Survey showed borrowers paying an average of 5.96 percent interest with 0.4 points for a 30-year fixed-rate mortgage during the week ending Dec. 6. That’s down from 6.1 percent the previous week, and has not been lower since the last week of September, 2005, when it averaged 5.91 percent.
Lower housing prices, personal spending and income are factors pushing mortgage rates down, according to Freddie Mac’s chief economist, Frank Nothaft.
“With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed,” Nothaft said in a press release. He said the federal funds futures market has priced in “almost a 100 percent probability” that the Fed will lower rates at its Dec. 11 policy committee meeting.
Although fixed-rate mortgage rates are not directly tied to the federal funds rate or Treasurys, “These combined factors will likely diminish upward pressures on mortgage rates over the next few months,” Nothaft said.
The Mortgage Bankers Association on Wednesday reported an average 5.82 percent rate for a similar loan with an average of 1.07 points for the week ending Nov. 30 (see Inman News story for other rates from in the MBA survey).
Freddie Mac reported that rates on 15-year fixed-rate mortgage this week averaged 5.65 percent with an average 0.5 point, down from 5.73 percent last week and the lowest rate since the second week of October, 2005 average of 5.62 percent.
Five-year hybrid adjustable-rate mortgages (ARMs) indexed to Treasurys averaged 5.75 percent with an average of 0.5 point, down from 5.86 percent a week ago and the best rate since the week ending Oct. 27, 2005, of 5.63 percent.
One-year Treasury-indexed ARMs averaged 5.46 percent with an average 0.6 point, up from 5.43 percent last week, which was also the average rate this time last year.
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