Mortgage rates fell for the third week in a row and appear to be headed even lower.
A week-over-week improvement was reported for the average 30-year fixed-rate mortgage, which was 4.71 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended Thursday.
It was a good-news-bad-news scenario, according to Freddie’s chief economist, Frank Nothaft.
“Weaker economic data reports reduced Treasury bond yields and allowed mortgage rates to drift lower for the third consecutive week,” Nothaft explained in the report. “For instance, real economic growth in the first quarter fell short of the market consensus forecast and represented the slowest pace since the second quarter of 2010. In addition, both the manufacturing and service sectors exhibited growth at a slower rate in
April, who noted that weak economic data pulled rates lower.”
It looks like rates might fall further based on 10-year Treasury yield action. An analysis of the 10-year yield suggests that the 30-year could fall to less than 4.65 percent in Freddie’s next survey.
But no clear direction was offered by Bankrate.com panelists for the week May 5 to May 11 — with 39 percent predicting that rates won’t move during the next week, a third projecting an increase and more than a quarter forecasting a decline.
Jumbo loans became more expensive this week relative to their conforming counterparts.
Freddie said that the average 15-year fixed-rate mortgage fell to 3.89 percent from 3.97 percent a week earlier. The difference between the 15-year and the 30-year mortgage increased — making the 15-year the more attractive option.
The one-year, Treasury-indexed ARM averaged 3.14 percent, down slightly over the past seven days.
The share of borrowers opting for an ARM was higher in the latest Mortgage Market Index report.
