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Weak economic indicators pushed interest rates on U.S. 30-year mortgages down this week after three consecutive weeks of gains, home funding company Freddie Mac
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Tony Dejak / AP |
One-year adjustable rate mortgages (ARM) declined to their lowest level in more than two years, averaging 4.94 percent compared to 5.11 percent last week.
Freddie Mac [FRE
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] said the "5/1" ARM, set at a fixed rate for five years and adjustable each following year, averaged 5.34 percent, down from 5.43 percent the prior week.
"Weak economic reports that indicated declines in the job market, slowing in manufacturing and low consumer confidence drove bond yields lower this week and mortgage rates followed," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
As mortgage rates fell, Nothaft said the housing market continued to be a drag on the rest of the economy.
"Residential fixed investment shaved 1.25 percentage points off economic growth in the fourth quarter of 2007," he said.
A year ago, 30-year mortgages averaged 6.14 percent, 15-year mortgages 5.86 percent and the one-year ARM 5.47 percent. The 5/1 ARM averaged 5.90 percent.
The National Association of Realtors reported on Thursday that pending sales of previously owned homes were unchanged January.
In a separate report, the Mortgage Bankers Association said the U.S. mortgage delinquency rate during the fourth quarter of 2007 hit 5.82 percent, the highest level since 1985.
Lenders charged an average of 0.5 percent in fees and points on 15- and 30-year mortgages, both unchanged from last week. They also charged 0.5 percent on both the 5/1 ARM and the one-year ARM. The 5/1 ARM was up from 0.4 percent in fees and points last week, while the one-year ARM was down from 0.7 percent.
Freddie Mac is a mortgage finance company chartered by Congress that buys mortgages from lenders and packages them into securities to sell to investors or to hold in its own portfolio.
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