Mortgage Rates Continue To Fall

percent sign with a down arrowMany people around the Chicagoland area thought they had seen mortgage rates fall to their lowest a week ago. Now comes news that mortgage rates dropped even further.
Freddie Mac’s Primary Mortgage Market Survey (PMMS), released last Thursday, shows the current mortgage rates as of the week ending June 21:

  • 30-year fixed rate mortgage now stands at 3.66 percent, down from last week’s average of 3.71 percent.
  • 15-year fixed rate mortgage is currently 2.95 percent, down from last week’s 2.98 percent average.
  • 5-year Treasury-Indexed adjustable-rate mortgage is at 2.77 percent this week, down from 2.80 percent from the prior week.
  • 1-Year Treasury-Indexed adjustable-rate mortgage averaged 2.47 percent this week, down from the 2.78 percent average of last week.

“Treasury bond yields eased somewhat this week on some worsening economic indicators bringing mortgage rates back into record low territory. Industrial production fell in two of the last three months ending in May, and below the expected market consensus forecast,” said Frank Nothaft, vice president and chief economist at Freddie Mac. “In addition, consumer sentiment fell in June to its lowest level this year, according to the University of Michigan survey. In its June 20 monetary policy announcement, the Federal Reserve also noted growth in employment has slowed in recent months and household spending appears to be rising at a somewhat slower pace.”
For every bit of good news emerging out of a housing market desperately trying to regain its footing, there always seems to be that left hook of bad news spoiling the party.
However, there is a silver lining according to Nothaft.
“There were also some positive indicators on the housing market. Construction on one-family homes rose for the third consecutive month in May to an annualized pace of 516,000. Furthermore, homebuilder confidence rose in June to its highest reading in over five years.”