Mortgage Rates Dip to 3.87 Percent as Market Misses Projections

Freddie Mac has released the results of its latest Primary Mortgage Market Survey (PMMS), showing average mortgage rates dropping to new all-time record lows of 3.87 percent with an average 0.8 point for the week ending Feb. 2, 2012, down from last week when it averaged 3.98 percent. Last year at this time, the 30-year fixed-rate mortgage (FRM) averaged 4.81 percent. Also this week, the 15-year FRM averaged 3.14 percent with an average 0.8 point, down from last week when it was at the 3.24 percent mark. A year ago at this time, the 15-year FRM averaged 4.08 percent. "Most mortgage rates eased to all-time record lows this week as fourth quarter growth in the economy fell short of market projections," said Frank Nothaft, vice president and chief economist for Freddie Mac. "The Gross Domestic Product rose 2.8 percent in the final three months of 2011, below the market consensus forecast of three percent, while consumer spending in December was flat. One bright spot, however, was that fixed residential investment increased for the third consecutive quarter and residential construction spending rebounded in December, rising 0.7 percent." Also this week the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.80 percent, with an average 0.7 point, down from last week when it averaged 2.85 percent. A year ago, the five-year ARM averaged 3.69 percent. The one-year Treasury-indexed ARM averaged 2.76 percent this week with an average 0.6 point, up from last week when it averaged 2.74 percent. At this time last year, the one-year ARM averaged 3.26 percent.