The newest Primary Mortgage Market Survey from Freddie Mac revealed Thursday that mortgage rates were down in the most recent week on record, due to housing figures and other economic statistics that fell below analyst forecasts.
According to Freddie Mac, the average rate on 30-year fixed-rate mortgages dropped to 4.28 percent for the week ended March 6, 2014, down nine basis points from the previous week’s 4.37 percent. Despite the decline, this remains close to 75 basis points higher than the year-ago average of 3.52 percent. 15-year fixed home loans lost seven basis points, falling from 3.39 percent to 3.32 percent, but still remaining over 60 basis points higher than last year’s reading of 2.76 percent.
Also making declines were rates for Treasury-indexed hybrid adjustable rate mortgages. 5-year ARMs ticked down by just two hundredths of a percentage point, slipping from 3.05 percent to 3.03 percent, while 1-year ARMs held steady at 2.52 percent. One year ago, 5- and 1-year ARMs were both at 2.63 percent.
Freddie Mac vice president and chief economist Frank Nothaft provided, per usual, his own insights on the recently concluded week’s mortgage numbers. “Mortgage rates were down this week as real GDP was revised downwards to 2.4 percent growth in the fourth quarter of 2013,” he explained. “Fixed residential investment negatively contributed to GDP decreasing 8.7% in the fourth quarter.” Nothaft added that only 139,000 jobs were created in February 2014, which was below the Wall Street consensus forecast.
Separate from Freddie Mac, Bankrate’s own mortgage rate data also revealed some declines, though not as evident as those on the Freddie survey. 30-year fixed mortgage rates dropped from 4.48 percent to 4.45 percent and 15-year fixed products slipped from 3.50 percent to 3.46 percent, while 5/1 ARMs decreased from 3.30 percent to 3.26 percent.
Quite interestingly, and in the light of the lack of mortgage rate gyrations on its report, Bankrate described the present rate of economic growth as a “Goldilocks scenario,” business jargon for conditions that are neither too hot nor too cold.