Freddie Mac: Mortgage rates drift lower, 30-year fixed at 4.41%
Signs that the economic recovery was weakening caused mortgage interest rates to drop early this week, with lenders telling Freddie Mac they were offering 30-year fixed loans to solid borrowers at an average rate of 4.41%.
That was down from 4.51% a week earlier, Freddie Mac said in its weekly survey, released Thursday. The government-backed finance company attributed the decline to reports showing only slight gains in job formation and retail spending in December.
The average for a 15-year fixed-rate mortgage fell to 3.45% from 3.56%, Freddie Mac said. The start rate for loans that become variable after the first five years also declined.
QUIZ: How much do you know about home lending?
The better the economic news, the greater the pressure on the Federal Reserve to scale back its rate-reducing stimulus programs. Weaker economic news also reduces the chance of higher inflation, which would make mortgage investors demand higher rates to compensate.
Freddie Mac asks lenders each week about the terms they are offering to borrowers who have strong credit histories and the income and assets to afford mortgage payments. The borrowers would have made down payments of at least 20% and would have paid less than 1% of the loan amount in upfront fees and discount points to the lenders.
The company, chartered by Congress in 1971, was designed to support housing by buying mortgages and selling bonds backed by home loans it guarantees. It and its sister firm, Fannie Mae, have been wards of the federal government since the mortgage meltdown brought them to the verge of collapse.
ALSO:
Job growth tumbles in December
December retail sales up only slightly
