Mortgage Rates Hold Steady After Katrina
Long-term mortgage rates showed no effect from the massive disaster unfolding in the Gulf Coast after Hurricane Katrina, with the average for the 30-year-rate holding steady last week, after falling each of the previous three weeks, according to Freddie Mac. ARM rates, however, continued to decline, displaying the uncertainty of the markets. The average for the benchmark 30-year, fixed-rate loan was unchanged this week at 5.71%; while the average for the 15-year, fixed-rate mortgage slipped slightly to 5.30%, from 5.32% last week. One-year ARM average also slipped to 445%, form 4.48%; and the five-year ARM average fell to 5.24%, from 5.30%.
"We expect that near-term growth will now be a bit weaker than had been anticipated, due in very large part to the disruption in economic activity brought on by Katrina last week," said Frank Nothaft, chief economist at Freddie Mac. "However, the federal monies that will flow into the damaged areas and the lower interest rates brought on by the disaster will stimulate economic growth next year, making up for the slowdown in the last part of this year.
Credit Union Journal Washington Bureau Chief Ed Roberts can be reached at eroberts