Mortgage rates resumed their downward course in the latest weekly readings, experiencing drag from cooler economic indicators in the United States and continued troubles abroad.
The average interest rate for a 30-year fixed-rate mortgage (FRM) slipped 7 basis points in the last week, settling at 3.59 percent (0.7 point) for the week ending February 5, Freddie Mac [1] reported [2] Thursday.
A year ago, the 30-year FRM was 4.32 percent and falling.
The 15-year FRM this week averaged 2.92 percent (0.6 point), falling from 2.98 percent a week ago.
"Mortgage rates fell this week following the release of weaker than expected pending home sales [3], which fell 3.7 percent in December," said Len Kiefer, deputy chief economist for Freddie Mac.
Kiefer also pointed to last week's report on gross domestic product [4], which showed the economy expanding at a much milder rate in Q4 2014 than the quarter prior—2.6 percent compared to 5.0 percent.
Adjustable rates moved in separate directions. According to Freddie, the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.82 percent (0.4 point) this week, down from 2.86 percent, while the one-year ARM averaged 2.39 percent (0.4 point), up from 2.38 percent.
Results were similar in Bankrate.com's [5] weekly survey, which recorded the 30-year fixed average at 3.80 percent (unchanged week-to-week) and the 15-year fixed average at 3.12 percent (down slightly).
"Although the U.S. economy is improving, not much has changed on the global stage, with continued weakness and slower growth in both developed and emerging markets worldwide," Bankrate said in an analysis. "This has helped sustain a high level of demand for the safety of U.S. Treasury securities, keeping both bond yields and mortgage rates low."