Mortgage rates dropped for the first time in five weeks this week, according to Freddie Mac's Primary Mortgage Market Survey.
For the week ending Aug. 29, the average rate for a 30-year fixed-rate mortgage was 4.51%, a dip of about 0.7 percentage points, compared to the previous week, when it averaged 4.58%. A year ago at this time, the average rate for a 30-year fixed-rate mortgage was about 3.59%.
The average rate for a 15-year fixed-rate mortgage was 3.54%, down about 0.7 percentage points, compared to the week prior, when it averaged 3.6%. A year ago at this time, the 15-year fixed-rate mortgage averaged 2.86%.
The average rate for a 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 3.24%, an increase of 0.5 percentage points, up from last week's 3.21%. A year ago, the 5-year ARM averaged 2.78%.
The average rate for a 1-year Treasury-indexed ARM averaged 2.64%, an increase of 0.4 percentage points, up from last week's 2.67%. At this time last year, the 1-year ARM averaged 2.63%.
The average rate for a 15-year fixed home loan is currently 3.34%, while the average rate for a 5-1 adjustable-rate mortgage is 3.12%.
The report's findings are in line with another report released earlier this week from Zillow, showing that the average rate on a 30-year fixed mortgage fell to 4.37%, a drop of 15 basis points from the week prior, when the average was 4.52%.
Mortgage interest rates began to rise in late June, after the Federal Reserve announced that it would likely begin tapering its $85 billion-a-month bond-buying program in the fourth quarter. In July, however, Federal Reserve Chairman Ben Bernanke issued more conservative statements, saying the Fed would base its decision on a range of economic data, including unemployment.
‘The Fed is monitoring the housing market closely after the run-up in mortgage rates over the past few months,’ says Frank Nothaft, vice president and chief economist of Freddie Mac, in a statement. ‘The 13.4 percent drop in new home sales in July led financial markets to speculate whether the Fed might delay reducing its bond purchases and allowed long-term bond yields and fixed mortgage rates to decline over the week.’
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