Saturday, March 06 2010
The average rate on a 30-year, fixed-rate mortgage was 4.97 percent this week, down from 5.01 percent last week, mortgage company Freddie Mac said Thursday. Last year at this time, rates on 30-year mortgages averaged 5.16 percent.
The average rate on 15-year, fixed-rate mortgages fell to 4.34 percent from 4.40 percent, Freddie Mac said.
Rates on five-year, adjustable-rate mortgages averaged 4.19 percent, down from 4.27 percent a week earlier. One-year ARMs rose to 4.33 percent from 4.22 percent.
Borrowers can reduce their interest rates by buying points, equal to 1 percent of the mortgage amount. The nationwide averages in Freddie Mac's survey were 0.7 points for 30-year mortgages and 0.6 points for 15-year, five-year and one-year loans.
"To me, these numbers say, for another week, so far so good," said Don Rissmiller, chief economist for New York-based Strategas Research Partners.
"The question that's lingering is what happens when the Fed removes its continuing support for housing."
A Federal Reserve program to buy as much as $1.25 trillion worth of mortgage-backed securities helped push rates to a record low 4.71 percent in December. On Wednesday, Federal Reserve Board Chairman Ben S. Bernanke reiterated the Fed's intention to end the purchases at the end of March.
His comments came in written testimony prepared for a House Financial Services Committee hearing that was postponed because of snow.
The Mortgage Bankers Association's index of mortgage applications fell 1.2 percent in the week ended Feb. 5, with the purchase gauge decreasing 7 percent and the refinancing gauge increasing 1.4 percent. More than two out of three mortgage applications were for refinance transactions over the first six weeks of this year, according to the association.