Fixed mortgage rates continued to trend downward this week – which is good news for prospective home buyers gearing up for the spring home shopping season.
According to Freddie Mac's Primary Mortgage Market Survey, during the week ending May 8, the average rate for a 30-year fixed-rate mortgage (FRM) was 4.21%, down from 4.29% the previous week. A year ago at this time, the 30-year FRM averaged 3.42%.
The average rate for a 15-year FRM was 3.32%, down from 3.38% the week prior. A year ago at this time, the 15-year FRM averaged 2.61%.
The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.05%, unchanged from last week. A year ago, the five-year ARM averaged 2.58%.
The average rate for a one-year Treasury-indexed ARM was 2.43%, down from 2.45% the previous week. At this time last year, the one-year ARM averaged 2.53%.
Freddie Mac points out that the fall in rates follows a decline in Treasury yields as the economic growth for the first quarter came in well below market expectations.
‘Mortgage rates continued moving down following the decline in 10-year Treasury yields after a dismal report on real GDP growth in the first quarter,’ says Frank Nothaft, vice president and chief economist, Freddie Mac, in a release. ‘Meanwhile, the economy added 288,000 jobs in April – the largest since January 2012 – and followed an upward revision of 36,000 jobs for the prior two months. Also, the unemployment rate fell to 6.3 percent.’