Mortgage rates eased back down this week, breaking a streak of
four consecutive weekly increases for fixed-rate loans.
Average interest rates fell across the board, with 30-year
fixed-rate mortgages falling to 3.59 percent in the weekly
rate survey, released today, down from 3.66 percent last week.
Meanwhile, average interest rates on 15-year fixed-rate mortgages
dropped to 2.86 percent, down from 2.89 percent last week.
Initial rates on adjustable-rate mortgages (ARMs) also declined
slightly, with the average on 5-year Treasury indexed ARMs dropping
to 2.78 percent, down from 2.80 percent last week. All rates
include an average of 0.6 points in fees and discount points.
Rates dropped following indications that the Federal Reserve may
soon take additional steps to boost the economy, according to Frank
Nothaft, Freddie Mac chief economist. Such measures typically
involve efforts to reduce interest rates, which led to a decline in
Treasury bond yields, with mortgage rates following.
Housing market improving
At the same time, Nothaft noted that the housing market has been
showing gradual improvement in recent months, with several positive
developments reported this week. The Census Bureau reported that
new home sales rose 3.6 percent in July to a seasonally adjusted
annual rate of 352,000 units, a 25 percent increase over the July
Meanwhile, the National Association of Realtors reported this
week that pending home sales were up 2.4 percent last month, with a
12.4 percent annual gain over July 2011 levels. Both new home sales
and pending sales figures set or equaled the highest reported
levels since April 2010, just before the deadline for the
first-time homebuyer tax credit program, with new home sales
matching the May 2012 figures.
In addition, Standard & Poor's reported that U.S. home
prices showed their first annual increases in nearly two years in
the second quarter of the year. The S&P/Case Shiller National
Home Price Index showed a 1.2 percent gain over the second quarter
of 2011, boosted by a 6.9 percent quarterly gain over the first
quarter of 2011.
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