Mortgage Rates Begin Rollercoaster Ride and Dip Back Down to 4.29 Percent

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing average fixed mortgage rates reversing course after last week's big jump that took rates to their highest levels since mid-2011. The average 30-year fixed-rate mortgage (FRM) dropped down to 4.29 percent this week from 4.46 percent last week. Last year at this time, the 30-year FRM averaged 3.62 percent. The 15-year FRM averaged 3.39 percent with an average 0.7 point this week, down from last week when it averaged 3.50 percent. A year ago at this time, the 15-year FRM averaged 2.89 percent.  "Fixed mortgage rates fell over the holiday week as market concerns over the timing of the Federal Reserve's pullback in bond purchases eased somewhat," said Frank Nothaft, vice president and chief economist, Freddie Mac. "Rates are still low by historical standards and should continue to aid in housing affordability and the ongoing recovery of the housing market. For instance, pending home sales rose 6.7% in May to the strongest pace in over six years. In addition, residential construction spendingincreased in four of the first five months this year." The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.10 percent this week with an average 0.7 point, up from last week when it averaged 3.08 percent. A year ago, the five-year ARM averaged 2.79 percent. The one-year Treasury-indexed ARM averaged 2.66 percent this week with an average 0.4 point, unchanged from last week. At this time last year, the one-year ARM averaged 2.68 percent.