Mortgage rates dropped for the sixth consecutive week despite signs of possibly unsettling inflation data, according to surveys conducted by Freddie Mac and Bankrate.com.
In Freddie Mac’s survey, the 30-year fixed-rate mortgage averaged 6.1 percent for the week ended today, down from last week’s average of 6.15 percent. This is the lowest the 30-year fixed has been since the week ending Oct. 20, 2005, when it averaged 6.1 percent.
The average for the 15-year fixed-rate mortgage this week is 5.67 percent, down from last week’s average of 5.71 percent. This is the lowest the 15-year fixed has been since the week ending Oct. 20, 2005, when it averaged 5.65 percent. Points on both the 30- and 15-year averaged 0.5.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 5.75 percent this week, with an average 0.6 point, down very slightly from last week when it averaged 5.76 percent. The one-year Treasury-indexed ARM averaged 5.18 percent, with an average 0.6 point, up from last week when it averaged 5.15 percent.
“Over the last six weeks, long-term mortgage rates have dropped nearly a quarter of a percent in the face of little or no inflationary pressures,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Our outlook for the housing industry continues to be that mortgage rates will remain affordable for the rest of the year at least, keeping the industry alive and well into the foreseeable future.”
In Bankrate.com’s survey, fixed mortgage rates dropped for the sixth straight week, with rates at the lowest point since mid-October. The average 30-year fixed-rate mortgage fell from 6.22 percent to 6.12 percent, Bankrate.com reported. The 30-year fixed-rate mortgages in this week’s survey had an average of 0.31 discount and origination points.
Bankrate.com reported that the average 15-year fixed mortgage rate was also down, retreating from 5.8 percent to 5.73 percent, while the average jumbo 30-year fixed-rate slid to 6.35 percent from 6.41 percent. Adjustable-rate mortgages followed suit, with the average 5/1 adjustable-rate mortgage stepping down from 5.82 percent to 5.71 percent, and the average one-year ARM declining from 5.54 percent to 5.46 percent.
Mortgage rates declined in response to weakness in December retail sales and a smaller-than-expected increase in producer prices, according to Bankrate.com. However, the Consumer Price Index (CPI) painted a different picture. The headline consumer price figure declined during December as oil prices fell. But this week, oil prices have surged to a three-and-a-half-month high. The core-CPI that excludes volatile food and energy showed a 2.2 percent increase during 2005, a pace that exceeds the Federal Open Market Committee’s comfort zone. A speech given on Wednesday by Federal Reserve Governor Susan Schmidt Bies pointed out the significance of inflation in Fed policy, saying “… the Federal Reserve will remain vigilant for any sign of a deterioration in the inflation outlook.”
The following is a sampling of Bankrate.com’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas:
New York – 6.13 percent with 0.18 point
Los Angeles – 6.16 percent with 0.48 point
Chicago – 6.23 percent with 0.04 point
San Francisco – 6.19 percent with 0.2 point
Philadelphia – 6 percent with 0.38 point
Detroit – 6.23 percent with no points
Boston – 6.14 percent with 0.11 point
Houston – 6.01 percent with 0.65 point
Dallas – 6.08 percent with 0.56 point
Washington, D.C. – 6.01 percent with 0.55 point
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