July 5, 2008
The average rate for the 30-year fixed-rate mortgage fell last week after increasing for four weeks.
Mortgage giant Freddie Mac says the rate for the 30-year loan dropped to 6.35 percent with an average 0.6 point from 6.45 percent last week. A year ago at this time, the 30-year FRM averaged 6.63 percent.
The 15-year FRM, popular in refinancing averaged 5.92 percent with an average 0.6 point, down 12 basis points from last week. It averaged 6.30 percent a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.78 percent this week, with an average 0.7 point, compared with 5.99 percent last week.
"Mortgage rates reversed their three-week rise, falling this week after the release of the latest Federal Reserve's policy statement that it expects inflation to moderate later this year and the reporting of May's timid increase in core personal consumption prices," said Frank Nothaft, Freddie Mac vice president and chief economist.
"According to recent trading activity in federal funds futures, market participants lowered somewhat their expectations of future rate hike hikes by the Fed compared to last week.
Housing affordability fell in April due to gains in median house prices during the month, according to the National Association of Realtors. However, even with the recent erosion in affordability, homes were still more affordable in April than during the 2005-2007 period of skyrocketing house prices.
