By Amy Hoak
Rates on fixed-rate mortgages dropped to near record lows this
week, with the 30-year fixed-rate mortgage making an encore
appearance below 5%, according to Freddie Mac's (FRE) weekly survey
of conforming mortgage rates, released on Thursday.
The 30-year fixed-rate mortgage averaged 4.98% for the week
ending March 19, down from 5.03% last week. The mortgage averaged
5.87% a year ago. It hasn't been lower since the week ending Jan.
15, when it hit the record low of 4.96%.
Fifteen-year fixed-rate mortgages averaged 4.61% this week, down
from 4.64% last week and 5.27% a year ago. The 15-year mortgage
hasn't been lower since the week ending June 13, 2003, when it
averaged 4.60%.
"Long-term mortgages followed bond yields lower for the second
week as reports of slower industrial production suggested that
business spending might ease this year," said Frank Nothaft,
Freddie Mac chief economist, in a news release.
"Following the March 18 Federal Reserve monetary policy
statement, which announced further spending initiatives on
financial assets, long-term bond yields plummeted. Yields on
10-year Treasury bonds fell by about a half percentage point after
the announcement, marking the largest one-day decline since Oct.
20, 1987."
Five-year Treasury-indexed hybrid adjustable-rate mortgages
averaged 4.98%, down slightly from last week's 4.99%. The ARM
averaged 5.56% a year ago.
But one-year Treasury-indexed ARMs averaged 4.91%, up from 4.80%
last week, yet still lower than its 5.15% average a year ago.
To obtain the rates, all mortgages in the survey required
payment of an average 0.7 point. A point is 1% of the mortgage
amount, charged as prepaid interest.
The Mortgage Bankers Association on Wednesday said that the
volume of mortgage applications filed was up a seasonally adjusted
21.2% last week, compared with the week before.
-By Amy Hoak, 415-439-6400; AskNewswires@dowjones.com