Mortgage rates sink to lowest on record
Mortgage rates slumped to record lows this week, Freddie Mac confirmed Thursday, with lenders on average offering 4.69% on a 30-year fixed-rate loan.
The average rate on the 30-year loan fell from 4.75% last week, dropping below the previous record of 4.71% set in December. As recently as early April, the average was at 5.21%.
The latest move down had been expected after Treasury yields -- which usually influence the direction of home-loan rates -- fell this week to their lowest levels in more than a year on concerns about the durability of the economic recovery.
Freddie Mac’s survey, which the mortgage giant has been conducting since 1971, asks lenders what rates they are offering -- and the upfront fees required to obtain those rates -- for well-qualified borrowers who have at least a 20% down payment for a home purchase or that much equity in a property being refinanced. Actual rates negotiated by solid borrowers are often slightly lower.
Upfront fees on 30-year fixed-rate mortgages this week averaged 0.7% of the amount borrowed.
Rates also hit record lows on 15-year fixed-rate mortgages and so-called 5-1 hybrids, which have a fixed rate for five years before turning adjustable for the remaining 25 years.
Despite the slide in mortgage rates in the last two months, the housing market has been showing renewed signs of weakness.
The government reported Wednesday that sales of newly built homes collapsed in May to a record low. And an industry group said that sales of existing homes slipped 2.2% last month.
Both drops were blamed on the expiration of a federal tax subsidy for home buyers, but the sales data also came in significantly lower than expected.