30-year mortgage rates hit another low
How low can they go? Freddie Mac reported this morning that average rates on a 30-year fixed mortgage sank to 4.58 percent, blowing past last week's record low of 4.69 percent by 11 basis points.
Rates on 15-year fixed loans hit a new record, 4.04 percent. Rates on 5/1 hybrids fell to a new record of 3.79, virtually equal to the average rate on a 1-year ARM at 3.8 percent. Only the 1-year ARM failed to set a record this week.
Freddie Mac chief economist Frank Nothaft said in a press release that we're in "a period when the economy struggles to gain momentum and inflation remains very low."
Our little Weekend Poll is unscientific and statistically insignificant. But with that grain of salt duly noted, it's interesting to check your responses to the June 25 poll, which asked how long mortgage rates would remain low. Here's the breakdown:
37 percent: Rates will go even lower.
35 percent: Rates will stay low through the rest of the year.
17 percent: Rates won't stay low for long; inflation is coming back.
10 percent: Rates will stay low well into next year.
Meanwhile, news just out from the National Association of Realtors is hardly encouraging. Pending home sales, based on homes going under contract in May, fell 30 percent from April and were 15.9 percent below a year ago.
Of course May was the first month without the federal home-buyer tax credit. And the month got off to an unsettling start with the Flash Crash on Wall Street. Even though a prospective home buyer's down payment money should never be tied up in the stock market, Wall Street drama doesn't exactly prompt people to declare, "Honey, let's buy a house!"
What do you think is going on? Are other factors more important than low mortgage rates now? And how long might the post-tax-credit funk last in the housing market?
July 1, 2010; 11:34 AM ET
Categories: Buying , Statistics , The economy , The market , Weekend Poll
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