McLEAN, Va. – Mortgage rates continued to plunge this week to their lowest in more than four years, as the Federal Reserve and Treasury continued efforts to boost home financing.
The average rate for the 30-year, fixed-rate mortgage declined this week to 5.53%–its lowest since March 2004–from 5.47% last week, according to Freddie Mac. The average for the 15-year, fixed-rate loan dipped to 5.20%, from 5.33% last week.
ARM rates moved slightly this week, with the average for the five-year ARM rising to 5.82%, from 5.77% last week; and the average for the one-year ARM moving to 5.09%, from 5.02%.
This week’s decline in long-term rates follows a drop-off of almost 50 basis points last week after the Fed and Treasury announced steps to shore up the market, including the purchase of $600 billion in agency securities from lenders.
But Freddie Mac said November's poor unemployment report was the main reason for the drop in rates. And yesterday, the Labor Department reported applications for jobless benefits last week rose sharply. "Following the release of the November employment report, which showed the largest monthly decline in jobs since December 1974, bond yields fell slightly this week allowing fixed-rate mortgage rates room to ease back a little further," said Frank Nothaft, chief economist for Freddie Mac.
