Mortgage Rates Lower Amid Weakening Economic Recovery

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing average fixed mortgage rates moving lower amid signs of a weakening economic recovery, as the 30-year fixed-rate mortgage (FRM) averaged 4.50 percent with an average 0.7 point for the week ending Sept. 19, 2013, down from last week when it averaged 4.57 percent. A year ago at this time, the 30-year FRM averaged 3.49 percent. The 15-year FRM this week averaged 3.54 percent with an average 0.7 point, down from last week when it averaged 3.59 percent. A year ago at this time, the 15-year FRM averaged 2.77 percent.   "Mortgage rates drifted downwards this week amid signs of a weakening economic recovery. Retail sales rose 0.2 percent in August which was nearly half of July's 0.4 percent increase," said Frank Nothaft, vice president and chief economist, Freddie Mac. "In addition,industrial production in August grew 0.4 percent, less than the market consensus forecast. And lastly, consumer sentiment fell for the second consecutive month in September to the lowest reading since April." The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.11 percent this week with an average 0.5 point, down from last week when it averaged 3.22 percent. A year ago, the five-year ARM averaged 2.76 percent. The one-year Treasury-indexed ARM averaged 2.65 percent this week with an average 0.4 point, down from last week when it averaged 2.67 percent. At this time last year, the one-year ARM averaged 2.61 percent.  "This, in part, was why the Federal Reserve chose to maintain its MBS and bond-buying program at its Sept. 12th and 13th monetary policy committee meeting," said Nothaft. "It also cited the tightening of financial conditions observed in recent months, which in the case of the housing market means the rise in mortgage rates since May."