No Bottom In Sight For Home Loan Rates

By: CBS (Posted by Carissa Fox)
By: CBS (Posted by Carissa Fox)
Fixed mortgage rates have tumbled to new lows. According to Freddie Mac

** FILE ** This July 13, 2008 file photo shows the Freddie Mac Corporate Office in McLean, Va. For years, mortgage giants Fannie Mae and Freddie Mac tenaciously worked to nurture, and then protect, their financial empires by invoking the political sacred cow of homeownership and fielding an army of lobbyists, power brokers and political contributors. Now, new attention is being focused on the bruised mortgage companies as the Bush administration presses its rescue plan to Congress. (AP Photo/Pablo Martinez Monsivais, File)

(MoneyWatch) Fixed mortgage rates have tumbled to new lows. According to Freddie Mac's latest Primary Mortgage Market Survey, the average rate on 30-year fixed loans has been below 4 percent for 16 weeks. The average 15-year fixed has been below 3 percent for seven weeks.

A disappointing jobs report and continually stagnant economy appears to be keeping a lid on rates. Average rates for the week ending June 12 are as follows:

The average interest rate for a 30-year fixed-rate mortgage was 3.56 percent, down from last week when it averaged 3.62 percent. One year ago, the average 30-year FRM was 4.51 percent.

A 15-year FRM averaged 2.86 percent, down from last week's average of 2.89 percent. At this time last year, the 15-year FRM averaged 3.65 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.74 percent, down from last week when it averaged 2.79 percent. A year ago, the 5-year Treasury-indexed ARM averaged 3.29 percent.

The 1-year Treasury-indexed ARM averaged 2.69 percent, up slightly from last week's rate of 2.68 percent. In the year-ago period, the 1-year ARM averaged 2.95 percent.

"Last week, rates were pushed to another all-time low by the worse-than-expected employment report on Friday," said Erin Lantz of real estate listing company Zillow, in a statement. "This week, rates should remain fairly flat with limited scheduled news to alleviate U.S. and European concerns."

"Following a lackluster employment report for June, long-term U.S. Treasury bond yields eased somewhat this week, allowing fixed mortgage rates to reach yet another record low," said Frank Nothaft, vice president and chief economist for Freddie Mac, in a news release. "Only 80,000 net new jobs were added to the economy last month, not enough to lower the unemployment rate from 8.2 percent."

The low rates reflect the fragile state of the economy, Lantz added, while describing the opportunity to refinance or get a new mortgage at low rates a "silver lining" for borrowers.

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