Mortgage Interest Rates drop to Lowest Rate Since May

Dennis Norman

According to Freddie Macs weekly mortgage market survey the interest rate on fixed-rate home mortgages dropped to the lowest rate since May 28th.  The survey shows the interest rate on a 30 year fixed rate mortgage averaging 5.08 percent with 0.7 percent in fees and points this week, down from 5.14 percent last week. Last year at this time, the 30 year interest rate averaged 6.35 percent.

The interest rate on a 15-year fixed rate mortgage averaged 4.54 percent with 0.6 percent in fees this week, down from 4.58 percent last week. Last year at this time the 15 year interest rate averaged 5.90 percent.

The interest rate on a five-year ARM averaged 4.59 percent with 0.6 percent in fees this week, down from 4.67 percent last week. A year ago at this time the five-year ARM interest rate averaged 5.97 percent.

The interest rate on a one-year ARM averaged 4.62 percent with 0.6 percent in fees this week, down from 4.69 percent last week. A year ago at this time the one-year ARM interest rate averaged 5.15 percent.

“Bond yields pushed mortgage rates slightly lower this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Low mortgage rates are helping to keep housing very affordable. Seven of the top eight most affordable months occurred during this year, according to the National Association of Realtors’® (NAR) Housing Affordability Index, which dates back to 1971. As a result, pending sales of existing homes rose for the sixth straight month in July, a trend not seen since the NAR began reporting data in 2001. Moreover, July’s sales were the strongest since June 2007.

“Overall, inflation remains in check while certain sectors of the economy are experiencing some improvement. The core price index on consumer expenditures, a key indicator tracked by the Federal Reserve, rose 1.4 percent in July from the same time a year earlier and represented the smallest 12-month increase since October 2003. Meanwhile, the manufacturing industry expanded for the first time in 19 months, according to the Institute of Supply Management.”

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