Mortgage Interest Rate Report – May 2009
May 4, 2009
Mortgage Rate News & Analysis
U.S. mortgage interest rates fell to a new record low at the beginning of April, according to information from mortgage company Freddie Mac, and then jumped back up into familiar territory for the rest of the month.
April 2
The first week of the month saw rates on 30-year fixed rate mortgages (FRMs) pushed to their lowest point in the 30-year history of the Freddie Mac survey. The average interest rate fell to 4.78 percent, excluding points, down from 4.85 percent the previous week.
“Mortgage rates followed other interest rates lower this week amid reports of slower economic growth” said Frank Nothaft, Freddie Mac vice president and chief economist. “The final estimate of economic growth in the fourth quarter was revised lower and personal incomes fell 0.2 percent in February, below the market consensus.”
The average rate on a 15-year FRM also fell, dropping from 4.58 to 4.52 percent, while one-year adjustable rate mortgages (ARMs) averaged 4.75 percent, down from 4.85 percent one week earlier.
April 9
The average interest rate on the 30-year FRM loan bounced back up to 4.87 percent in the second week, and the average rate on the 15-year FRM grew to 4.54 percent. One-year ARMs carried an average rate of 4.83 percent, also up from the previous week. Freddie Mac offered no explanation for the rise in rates, but instead assured the nation that the current figures were still at historic lows and well within the affordable range.
April 16
Rates on 30-year FRM loans eased in the third week to 4.82 percent, as 15-year FRMs fell to an average commitment rate of 4.48 percent. One-year ARM rates, however, actually increased to an average of 4.91, making it unusually more expensive than the traditional 30-year mortgage.
April 23
Long-term rates continued to fall in the fourth week of April, inching down to an average of 4.80 percent on the 30-year FRM. Fifteen-year FRM interest rates remained unchanged, and one-year ARM rates moved back down
What’s Next for Interest Rates?
From the looks of several Internet polls, most analysts expect interest rates to stay where they are or decrease only slightly in the next 30 days. The consensus seems to be that as the U.S. Treasury Department continues to buy up troubled mortgage-backed securities, interest rates will be kept artificially low. Most think this will be the case until the mortgage market really starts to show signs of recovery.
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Source: Real Estate ABC
