For the second week in a row, mortgage rates hit new record lows, and for the first time since mid-October 2009, the 15-year fixed-rate mortgage rate is lower than the 5-year adjustable-rate mortgage (ARM) average.[IMAGE]
The average 30-year fixed-rate mortgage ""for the week ending October 4"":http://www.freddiemac.com/pmms/ was 3.36 percent (0.6 point), down from last week's average of 3.40 percent, according to Freddie Mac. ""Bankrate"":http://www.bankrate.com/ also recorded a fall in the 30-year fixed-rate mortgage but recorded an average rate a little higher at 3.52 percent (0.44 point).
The 15-year fixed-rate mortgage also fell last week to an average of 2.69 percent (0.5 point), down from 2.73 percent the previous week, according to Freddie Mac. Again, Bankrate recorded a slightly higher average, albeit a record-low for its index. The 15-year fixed-rate mortgage averaged 2.84 percent, according to Bankrate.
The 5-year Treasury-indexed hybrid ARM was the only rate to rise over the last week, up to 2.72 percent (0.6 point) from 2.71 percent the previous week, according to Freddie Mac.
The 1-year Treasury-indexed ARM fell from 2.60 percent to 2.57 percent (0.4 point).
Frank Nothaft, VP and chief economist at Freddie Mac, attributes the falling rates to ""mortgage securities purchases by the Federal Reserve and indicators of a weakening economy,"" such as slow personal income growth in August├â┬ó├óÔÇÜ┬¼├óÔé¼┼ôjust 0.1 percent├â┬ó├óÔÇÜ┬¼├óÔé¼┼ôa 2.6 percent decline in pending home sales, and last quarter's downwardly revised Gross Domestic Product.
According to Bankrate, the ""historically low rates led to a surge in refinances last week.""
Looking forward, Bankrate suggests it's unlikely rates will rise ""anytime soon.""