The 30-year fixed-rate mortgage edged up just slightly, averaging 5.03 percent for the week ending October 29, 2009, up from last week when it averaged 5.00 percent, according to Freddie Mac. Last year at this time, the 30-year averaged 6.46 percent.
The 15-year this week averaged 4.46 percent, up from last week when it averaged 4.43 percent. A year ago at this time, the 15-year averaged 6.19 percent.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.42 percent this week, up from last week when it averaged 4.40 percent. A year ago, the 5-year ARM averaged 6.36 percent.
The one-year Treasury-indexed ARM averaged 4.57 percent this week, up from last week when it averaged 4.54 percent. At this time last year, the 1-year ARM averaged 5.38 percent.
“Interest rates for 30-year fixed mortgages have averaged just below 5 percent this year, which is the lowest 10-month average since the survey began in 1971,” said Frank Nothaft, Freddie Mac vice president and chief economist. “As a result, refinance activity has accounted for almost seven out of 10 mortgage applications on average this year, according to Freddie Mac’s survey."
Government stimulus efforts, including up to $1.45 trillion of mortgage-related debt purchases by the Federal Reserve — the U.S. central bank, have sliced and held down borrowing costs to bolster the housing market and the economy.
Demand for mortgages, however, slid last week for the third straight week, with home purchase applications the weakest since mid-May and refinancing requests at a two-month low.
Many borrowers who would have applied for the federal $8,000 first-time buyer tax credit in the past week would be unlikely to close on their loans before the Nov. 30 deadline.
Congress is hashing out a possible extension of the tax credit to keep stoking the fragile housing market.
In reporting a 9.4 percent jump in existing home sales for September, the National Association for Realtors last week said first-time buyers accounted for more than 45 percent of sales during the past year.
New home sales, however, posted a surprise 3.6 percent drop last month, the Commerce Department said on Wednesday after rising the five prior months.
—Reuters contributed to this report