Mortgage rates declined for the fourth straight week on news of disappointing home construction and a slowing economy, according to Freddie Mac’s weekly mortgage survey.
In Freddie Mac’s survey, the 30-year fixed-rate mortgage dipped to an average 6.52 percent this week, down from last week’s average of 6.55 percent and down significantly from 6.8 percent four weeks ago.
The average for the 15-year fixed-rate mortgage this week remained at 6.2 percent.
Points, which are fees charged by lenders for loan processing expressed as a percent of the loan, averaged 0.3 on the 30- and 15-year loans.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) fell to 6.18 percent this week, with an average 0.4 point, from last week’s rate of 6.21 percent. The one-year Treasury-indexed ARM averaged 5.65 percent, with an average 0.5 point, down from last week when it averaged 5.69 percent.
“Long-term rates continue to relax as economic reports support a picture of a weakening housing sector and a slower-growing economy,” said Frank Nothaft, Freddie Mac vice president and chief economist. “This week’s news that July housing starts fell 2.5 percent added conviction to Fed Fund futures traders who are currently pricing contracts to suggest the chances of another rate increase from the central bank this year are about 50-50.
“As a result, 30-year fixed-rate mortgages are down for the fourth straight week and are the lowest they’ve been since mid-April. Meanwhile, ARM rates have gone down less. All of which could help persuade homeowners with ARMs on the verge of resetting to make the decision to lock into a fixed-rate mortgage now rather than take a chance of a higher rate on the adjustment date.”
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 – 6.43 percent with 0.24 point
Los Angeles – 6.58 percent with 0.53 point
Chicago – 6.68 percent with 0.06 point
San Francisco – 6.55 percent with 0.31 point
Philadelphia – 6.42 percent with 0.36 point
Detroit – 6.62 percent with 0.03 point
Boston – 6.57 percent with 0.14 point
Houston – 6.47 percent with 0.44 point
Dallas – 6.44 percent with 0.52 point
Washington, D.C. – 6.38 percent with 0.64 point