Mortgage Rates Plunge to Post-Summer Lows

Though Capitol Hill's gridlock over the debt ceiling was resolved--for now, at least--last week, mortgage rates this week took a spill as market uncertainty spooked investors.

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""Freddie Mac"":http://www.freddiemac.com/ released Thursday its Primary Mortgage Market Survey, which shows the 30-year fixed-rate mortgage (FRM) falling to an average rate of 4.13 percent (0.8 point) for the week ending October 24, down from 4.28 percent and the lowest level in about four months. Last year at this time, the 30-year FRM averaged 3.41 percent.

The 15-year FRM this week averaged 3.24 percent (0.6 point), down from 3.33 percent.

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Adjustable rates were also impacted. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.00 percent (0.4 point) for the week, declining 7 basis points, while the 1-year ARM averaged 2.60 percent (0.5 point), down 3 basis points.

""Mortgage rates slid this week as the partial government shutdown led to market speculation that the Federal Reserve will not alter its bond purchases this year,"" explained Frank Nothaft, VP and chief economist for Freddie Mac.

""The ""weak employment report"":https://themreport.com/articles/september-unemployment-rate-at-72-job-growth-still-weak-2013-10-22 for September added to this expectation. The economy added just 148,000 jobs, which was below the market consensus forecast and less than the 193,000 jobs increase in August,"" he added.

""Bankrate.com's"":http://www.bankrate.com/ weekly measure of interest rates also showed them declining to a post-summer low, with the 30-year fixed averaging 4.42 percent and the 15-year fixed averaging 3.37 percent.

Bankrate's measure for the 5/1 ARM was down to 3.27 percent.

""Worries about the damage inflicted on the economy by the circus in Washington, and a disappointing jobs report, drove investors into the haven of government bonds, driving yields lower,"" Bankrate said in its release. ""As we play catch-up on economic data, and get a read on the economy over the next month or so, this uncertainty should keep a lid on mortgage rates.""