Mortgage rates this week fell to lows not seen since April after news of last month’s disappointing job growth, according to surveys conducted by mortgage buyer Freddie Mac and Bankrate.
In Freddie Mac’s weekly survey, the 30-year fixed-rate mortgage averaged 6.01 percent for the week ended today, down from last week when it averaged 6.21 percent.
The average for the 15-year fixed-rate mortgage this week is 5.42 percent, also down from last week when it averaged 5.62 percent. Points on both the 30- and 15-year averaged 0.6.
One-year Treasury-indexed adjustable-rate mortgages averaged 4.05 percent this week, with an average 0.6 point, down from last week when it averaged 4.19 percent.
“Long-term mortgage rates this week fell to levels equal to those experienced in April, reacting in large part to last Friday’s news of less-than-stellar job growth in June,” said Frank Nothaft, Freddie Mac vice president and chief economist. “This is good news for those who are still house hunting, as lower rates mean more affordable housing.
“Meanwhile, home construction remains strong and home sales continue to break records easily. In fact, total home sales should end the year 2 percent higher than 2003’s all-time record level.”
Fixed mortgage rates plunged sharply in response to lower-than-expected job growth in June, according to Bankrate.com’s weekly national survey of large lenders. The average 30-year fixed-rate mortgage fell from 6.3 percent to 6.08 percent in Bankrate’s survey.
The 30-year fixed-rate mortgages in this week’s survey had an average of 0.32 discount and origination points.
The 15-year fixed-rate mortgage popular for refinancing dropped from 5.71 percent to 5.48 percent, while the average jumbo 30-year fixed-rate mortgage fell from 6.5 percent to 6.28 percent. The average one-year adjustable-rate mortgage sank 10 basis points to 4.33 percent. A basis point is one one-hundredth of one percentage point.
The big drop in mortgage rates happened just days after the Federal Reserve’s rate-setting committee boosted short-term interest rates. The Federal Reserve doesn’t control long-term mortgage rates, and consumers can see that a Fed rate hike doesn’t necessarily mean an increase in long-term mortgage rates. Other factors, such as employment and inflation, exert more influence on mortgage rates. In this case, mortgage rates declined in response to a report showing 112,000 new jobs created during June, less than half of the 250,000 expected. Bond yields, to which mortgage rates are closely related, dropped sharply as it reduced the likelihood of aggressive Fed interest rate increases.
The following is a sampling of Bankrate’s average 30-year-mortgage interest rates this week in some U.S. metropolitan areas.
New York – 6.11 percent with 0.14 point
Los Angeles – 6.11 percent with 0.52 point
Chicago – 6.18 percent with 0.08 point
San Francisco – 6.13 percent with 0.3 point
Philadelphia – 6.09 percent with 0.36 point
Detroit – 5.96 percent with 0.25 point
Boston – 6.17 percent with 0.1 point
Houston – 6.01 percent with 0.48 point
Dallas – 6.05 percent with 0.31 point
Washington, D.C. – 5.98 percent with 0.65 point
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