Friday, August 07 2009
By Amy Hoak, MarketWatch
CHICAGO (MarketWatch) -- Economic reports that were better than expected kept mortgage rates low this week, Freddie Mac's chief economist said on Thursday.
The 30-year fixed-rate mortgage averaged 5.22% for the week ending Aug. 6, down from 5.25% last week and 6.52% a year ago, according to Freddie Mac's weekly survey of conforming mortgage rates. Fifteen-year fixed-rate mortgages averaged 4.63%, down from 4.69% last week and 6.10% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.73%, down from 4.75% last week and 6.05% a year ago. And 1-year Treasury-indexed ARMs averaged 4.78%, down from 4.80% last week and 5.22% a year ago.
To obtain the rates, the fixed-rate mortgages and the 5-year ARM required payment of an average 0.6 point and the 1-year ARM required an average 0.5 point. A point is 1% of the mortgage amount, charged as prepaid interest.
"Better-than-expected economic reports helped to keep mortgage rates low this week," said Frank Nothaft, Freddie Mac vice president and chief economist, in a news release. "The economy slowed by an annual rate of 1% in the second quarter, which was more positive than market forecasts."
Demand for housing improved as well, he added.
"The first half of this year contained the top six months with the most affordable housing conditions since the National Association of Realtors began calculating its Housing Affordability Index in January 1971. As a result, pending existing home sales rose for five consecutive months ending in June, a trend not seen since July 2003. In June, a typical family would have devoted 15.7% of their gross income to mortgage principal and interest payments, the NAR explained," Nothaft said.
Mortgage applications filed last week were up a seasonally adjusted 4.4% for the week ending July 31, compared with the week before, according to a separate survey from the Mortgage Bankers Association, released earlier this week. See full story.
Amy Hoak is a MarketWatch reporter based in Chicago.