Higher gasoline prices and concerns about Chinese growth fed bond investments this week, driving down mortgage rates once again amid worrying signs about the economy.
[IMAGE]Mortgage giant ""Freddie Mac"":http://www.freddiemac.com/ found rates for the 30-year fixed-rate mortgage falling from 4.08 percent last week to 3.99 percent this week.
The company said the 15-year loan fell from 3.30 percent last week to 3.23 percent this week, a change of pace from 4.09 percent seen year-over-year.
Five-year and 1-year adjustable-rate mortgages (ARMs) meanwhile slid from 2.96 percent and 2.84 percent to 2.90 percent and 2.78 percent, respectively.
""Frank Nothaft"":http://www.freddiemac.com/bios/exec/nothaft.html, VP and chief economist with Freddie, attributed
[COLUMN_BREAK]the declines to ""weaker economic indicators,"" including declines for home prices and new-home sales, according to several sources.
""Anything that boosts demand for bonds - such as worries about the economy - brings about lower mortgage rates,"" ""Greg McBride"":http://www.bankrate.com/blogs/federal-reserve/about-greg-mcbride-cfa.aspx, senior financial analyst with finance Web site ""Bankrate.com"":http://www.bankrate.com/, tells us.
He says that interest rates for home loans ""pulled back following last week's spike due to concerns about the effects of gasoline prices on the U.S. economy and slower growth in China.""
For Bankrate.com, the 30-year fixed-rate mortgage fell from 4.29 percent to 4.23 percent, alongside declines from 3.48 percent to 3.44 percent for 15-year loan rates.
The Web site said that the 5-year and 1-year ARMs both fell from 3.24 percent to 3.14 percent this week.
Mortgage rates remain near record lows, a constant for the last string of months as debt crises wax and wane overseas and the U.S. economy steadily shows signs of repair.
Interest rates ratchet down when investors buy bonds, a trend that continues to take place as Europe struggles to mend itself and the Chinese economy slows.
Just how much longer will mortgage rates stay buckled in aboard their rollercoaster?
Adds McBride: ""Despite better news on the economy in recent months, the economy isn't anywhere near strong enough to suggest mortgage rates will get to 5 percent during 2012.""