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Mortgage Rates Fall to Lowest Point Since May 2013

percentage-lowA gloomy week in economic news meant additional declines in mortgage interest rates.

The average interest rate for a 30-year fixed-rate mortgage (FRM) fell to 3.89 percent (0.5 point) for the week ending December 4, Freddie Mac reported Thursday in its Primary Mortgage Market Survey. The week's average was down from 3.97 percent last week and 4.46 percent a year ago.

According to the company, it was the lowest average 30-year rate recorded since the end of May last year.

The 15-year FRM also fell, averaging 3.10 percent (0.5 point) from last week's 3.17 percent.

Frank Nothaft, chief economist and VP at Freddie Mac, attributed the latest round of decreases to "a week of underwhelming economic releases."

"New home sales missed consensus expectations by selling at an annual pace of 458,000 units in October and the National Association of Realtors reported that pending home sales dipped in October by 1.1 percent," Nothaft said, adding, "The ADP's estimate for payroll growth in November was 208,000 jobs, under expectations by 225,000."

Hybrid adjustable rates were also down this week, averaging 2.94 percent (0.5 point) for the 5-year adjustable-rate mortgage (ARM) and 2.41 percent (0.4 point) for the 1-year ARM.

Freddie Mac wasn't the only company to record lower averages this week. Finance site Bankrate.com reported a minor drop in the average 30-year fixed rate, bringing it to 4.07 percent.

"The ongoing concerns about the global economy have not only kept a lid on long-term bond yields, but outweighed the positive news by just enough to push both bond yields and mortgage rates slightly lower," Bankrate said in its weekly national survey. "Even the upcoming employment report may not be enough to overshadow worries about economies overseas."

Other indicators were mixed, with the 15-year fixed remaining flat at 3.29 percent and the 5/1 ARM sliding up to 3.20 percent, Bankrate reported.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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