Fixed mortgage rates edged down slightly during the week ended July 30, with the average rate for a 30-year fixed-rate mortgage (FRM) dipping to under 4%, according to Freddie Mac's Primary Mortgage Market Survey.
The average rate for a 30-year FRM was 3.98%, down from 4.04% the previous week, according to the report. A year ago at this time, the 30-year FRM averaged 4.12%.
The average rate for a 15-year FRM was 3.17%, down from 3.21% the previous week. A year ago at this time, the 15-year FRM averaged 3.23%.
The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 2.95%, down from 2.97% the previous week. A year ago, the five-year ARM averaged 3.01%.
The average rate for a one-year Treasury-indexed ARM was 2.52%, down from 2.54%. At this time last year, the one-year ARM averaged 2.38%.
‘Monday's eight percent decline in Chinese stock prices triggered similar – though smaller – sell-offs in global equity markets,’ says Sean Becketti, chief economist for Freddie Mac, in a statement. ‘The associated flight to quality drove U.S. Treasury yields down nearly five basis points. Accordingly, 30-year fixed-rate mortgages fell six basis points.’
Becketti notes that the average rate for a 30-year fixed-rate loan has ranged between 3.98% and 4.09% since the first full week of June, ‘falling a bit when events overseas take a turn for the worse and rising when the clouds appear ready to part.’
‘With no clear direction coming from the Fed â�¦ we expect more of the same in coming weeks,’ he adds.
‘Recent housing data exhibited the same good news/bad news pattern as overseas developments,’ he continues. ‘Coming into this week, existing-home sales for June and the latest Federal Housing Finance Agency house price measures both suggested a stronger tone in the housing market. However, this week brought nothing but bad – or at least weaker-than-expected – news. New homes sales and pending home sales both weakened, and the Case-Shiller house price indices, while positive, fell below the lower end of expectations. Finally, the inadvertent release of Fed staff projections increased uncertainty over the timing of future Fed rate moves.’