Fixed Rates Move Little, Stay Near Record Lows
Fixed mortgage rates stayed relatively calm this week as economic indicators showed improved strength, according to Freddie Mac’s Primary Mortgage Market Survey.
The 30-year fixed averaged 3.34 percent (0.7 point) for the week ending December 6, up from the previous week’s average of 3.32 percent. This week’s average is only three basis points up from the survey’s record low (achieved the week ending November 21).
Meanwhile, adjustable-rate mortgages (ARMs) posted decreases. The 5-year Treasury-indexed ARM averaged 2.69 percent (0.6 point), down from 2.72 percent in the last survey. The 1-year ARM averaged 2.55 percent (0.4 point), dropping from 2.56 percent before.
“Mortgage rates were little changed and near record lows this week amid indicators of stronger economic growth and signs of tame inflation,” said Frank Nothaft, VP and chief economist at Freddie Mac, pointing to news of upward revisions in real GDP growth and stability in core price growth on consumer expenditures.
“The housing market is aiding in this recovery,” he added. “For instance, fixed residential investment added positive growth over the past six consecutive quarters in the third quarter alone contributed 0.4 percentage points to real GDP growth. In addition, residential construction spending was up 3 percent between September and October. And, pending home sales saw a 5.2 percent increase in October to its highest reading since March 2007.”
While Freddie Mac’s survey showed increases in fixed rates, Bankrate’s weekly survey saw them slipping to new lows. According to Bankrate’s index, the 30-year fixed averaged 3.50 percent this week, falling to a new record from 3.52 percent previously. The 15-year fixed also fell, dropping from 2.86 percent last week to 2.85 percent this week.
Adjustable rates were flat at 2.74 percent.
Opinions on where rates will go next were split, with 50 percent of analysts surveyed by Bankrate saying they expect no change and 42 percent expecting continued drops. Most experts in the “Down” category cited the markets concerns about the fiscal cliff and what they expect to be a disappointing jobs report on Friday.
Author Bio: Rob Alley earned a bachelors degree at Virginia Tech, in Blacksburg, VA in Biology. Rob Alley has been licensed for 6 years, he and his team of 4 agents consults with homeowners regarding Real Estate transactions and speciliazes in listing and selling Central Virginia Real Estate - Charlottesville, Louisa, Orange, Lynchburg, Nelson, Fluvanna, Amherst, Bedford, Campbell, Waynesboro and Augusta. Realtor/Owner of Virginia Real Estate Solutions at RE/MAX Assured Properties “The housing market is aiding in this recovery,” he added. “For instance, fixed residential investment added positive growth over the past six consecutive quarters in the third quarter alone contributed 0.4 percentage points to real GDP growth. In addition, residential construction spending was up 3 percent between September and October. And, pending home sales saw a 5.2 percent increase in October to its highest reading since March 2007.”
While Freddie Mac’s survey showed increases in fixed rates, Bankrate’s weekly survey saw them slipping to new lows. According to Bankrate’s index, the 30-year fixed averaged 3.50 percent this week, falling to a new record from 3.52 percent previously. The 15-year fixed also fell, dropping from 2.86 percent last week to 2.85 percent this week.
Adjustable rates were flat at 2.74 percent.
Opinions on where rates will go next were split, with 50 percent of analysts surveyed by Bankrate saying they expect no change and 42 percent expecting continued drops. Most experts in the “Down” category cited the markets concerns about the fiscal cliff and what they expect to be a disappointing jobs report on Friday.
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