Mortgage Rates Dip Amid Declining Economic Data
WASHINGTON – Mortgage rates declined slightly this week after some weak economic reports, including one showing a continued drop in home prices, according to Freddie Mac.
The average rate for the benchmark 30-year, fixed-rate loan slipped to 4.78% from 4.80% last week’ while the average for the 15-year, fixed-rate mortgage slipped to 3.97%, from 4.02%.
ARM rates also moved lower, with the average for the five-year ARM falling to 3.51%, from 3.61% last week; and the average for the one-year ARM inching down to 3.15%, from 3.16%.
“Mortgage rates followed Treasury bond yields lower this week amid weak local economic data reports on business conditions and house prices,” said Frank Nothaft, chief economist for Freddie Mac.
“Regional Federal Reserve banks reported that business and manufacturing activities declined in Philadelphia, Dallas and Richmond in April. In addition, the S&P/Case-Shiller 20-city composite home price index recorded year-over-year declines through February in 19 of the 20 markets.”
Nothaft also pointed out that falling home prices and an elevated number of foreclosures are affecting how long people are staying in their homes.
“Between the third quarter of last year and the first quarter of 2011, the housing stock experienced a decline of nearly 400,000 homeowners on net, according to the Census Bureau,” Nothaft said. “However, the National Association of Realtors reported that during the same period there were almost 700,000 first-time home buyers, which suggests gross losses may have been closer to 1.1 million homeowners over the October-through-March time frame.”