What a wild month for mortgage rates April has been. Like a backstabbing competitor on a reality show, mortgage rates have been going lower than anyone could have anticipated. You may have read a bevy of metaphors in last week’s Primary Mortgage Market Survey describing how low mortgage rates have become, but I had only scratched the surface. This week, 15-year fixed-rate mortgages and 5-year adjustable-rate mortgages hit record-breaking lows. How low, you ask? If these mortgage rates were fish in the ocean, they’d be low enough to be those creepy, transparent, bottom-dwelling fish you see in National Geographic once a year. If they were pants on a misguided youth, they would be below the knees. If these mortgage rates were a bomb shelter, they’d be so deep in the Earth no man-made bomb would make them even tremble. Before I go on too long of a rant here, read the raw numbers straight from Freddie Mac:
30-year fixed-rate mortgage averaged 3.40% with an average 0.8 point for the week ending April 25, 2013, down from last week when it averaged 3.41% percent. Last year at this time, the 30-year FRM averaged 3.88%.
15-year fixed-rate mortgage this week averaged 2.61% with an average 0.7 point, down from last week when it averaged 2.64%. A year ago at this time, the 15-year FRM averaged 3.12%.
5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.58% this week with an average 0.5 point, down from last week when it averaged 2.60%. A year ago, the 5-year ARM averaged 2.85.
1-year Treasury-indexed adjustable rate mortgage averaged 2.62% this week with an average 0.3 point, down from last week when it averaged 2.63%. At this time last year, the 1-year ARM averaged 2.74%.
These numbers go beyond metaphors because, well, they’re real figures and not abstract, unnecessary metaphors. What also may be a better summary of how and why mortgage rates have fallen for four weeks in a row is an explanation from Frank Nothaft, VP and chief economist of Freddie Mac:
“The housing market is getting a boost with mortgage rates hovering at or near record lows. For instance, existing home sales averaged an annualized pace of 4.94 million over the first three months of this year, the most since the fourth quarter of 2009. More impressively, new home sales topped 424,000 during the first quarter, which was the strongest since the third quarter of 2008. The sales pickup is helping to support house-price gains. For instance, the Federal Housing Finance Agency reported that February marked the thirteenth consecutive month that it has recorded an annual rise in its U.S. house price index, which rose by 7.1 percent in the twelve months through February, the most since May 2006. Even with these gains, this U.S. index is still 13.6 percent below its peak set in April 2007.”
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