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Freddie Mac: Mortgage rates decline again as 30-year averages 4.14%

Economy, Business and FinancePricesFreddie Mac
Average 30-year mortgage rate falls to 4.14%, a low for the year
Freddie Mac: Mortgage rates at lowest point in nearly seven months
The last time mortgage rates were this low was Halloween; Freddie Mac says 30-year average slips to 4.14%

Mortgage rates fell for the fourth week in a row, with Freddie Mac pegging the average for a 30-year fixed home loan at 4.14%, down from 4.2% last week.

Not since the end of October have rates been so low, according to the survey -- an enticement for  borrowers to enter the sputtering housing market or in some cases refinance their homes. 

The average offering rate for 15-year fixed mortgages dropped from 3.29% to 3.25%, Freddie Mac said Thursday -- also the lowest point since Halloween decorations were up.

The average start rate for a loan that becomes variable after five years fixed was 2.96%, down from 3.01% and the lowest since December. 

The decline comes amid mixed economic news.

Freddie Mac's chief economist, Frank Nothaft, noted that industrial production slipped 0.6% in April, below consensus expectations. A slowing economy tends to reduce inflation worries and make bonds a more attractive investment, both of which put downward pressure on interest rates.

On the other hand, the housing market, which had been a drag on the economy, is showing flickers of life. Seasonally adjusted home resales rose 1.3% from March to April, the first gain this year, the National Assn. of Realtors said Thursday. 

The trade association said the number of homes offered for sale had increased "meaningfully" as price increases moderated.

“We’ll continue to see a balancing act between housing inventory and price growth, which remains stronger than normal simply because there have not been enough sellers in many areas,” said Lawrence Yun, chief economist for the real-estate lobbying group.

“More inventory and increased new-home construction will help to foster healthy market conditions,” Yun said.

Freddie Mac asks lenders early each week about the terms they are offering to solid borrowers. The borrowers in Thursday's survey would have paid about half of 1% of the loan amount in upfront fees to the lenders.

Copyright © 2014, Los Angeles Times
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