30-year mortgage falls for 6th week
Average at 5.57% is lowest since early April: Freddie Mac
By Rachel Koning, MarketWatch
The average rate on a 30-year fixed mortgage was 5.57 percent in the week ending Feb. 10, down from last week's 5.63 percent, Freddie Mac (FRE: news, chart, profile) said.
The drop came alongside a decline in the benchmark 10-year Treasury yield, which fell when January's U.S. payrolls tally, reported last Friday, fell short of estimates.
The 30-year rate has not been this low since the week ending April 1, 2004, when it hit 5.52 percent.
Last year at this time, the 30-year rate averaged 5.66 percent, said Freddie Mac, which has been tracking mortgages on a regular basis since the late 1970s.
The average for the 15-year fixed loan this week was 5.10 percent, down from last week's 5.14 percent, but up from last year's 4.96 percent.
A five-year Treasury-indexed hybrid adjustable-rate mortgage, or ARM, averaged 4.99 percent this week, down slightly from 5 percent. There is no annual historical information for last year since Freddie Mac began regularly tracking this mortgage rate only at the start of this year.
A one-year ARM averaged 4.11 percent in the week through Thursday, down from 4.23 percent.
A weekly drop in the ARM has been a rare occurrence; this week's decline is the first in five weeks.
The rate has been rising in step with an increase in the Federal Reserve's target interest rate. The Fed has lifted its rate, currently at 2.5 percent, six times since last June and is likely to do so again next month. See the Economics and Politics page.
The one-year ARM averaged 3.57 percent at this time last year.
Mortgage rates may continue to drift lower in the short run.
The 10-year Treasury note yield, a key influence on longer-term mortgage rates, fell below 4 percent this week for the first time since last October. The yield did drift back above 4 percent Thursday. See Bond Report.
Frank Nothaft, Freddie Mac's chief economist, said data show the 30-year mortgage rate has been held below 6 percent over six months, a factor he says has kept the housing market bustling.
He predicts the rate will average roughly 6 percent this year.
For the latest loan results, the 30-year fixed-rate and the one-year ARM assumed the payment of an average of 0.8 point to achieve the rate; the 15-year loan and the five-year ARM required 0.7 point. A point equates to 1 percent of the loan amount, charged as prepaid interest
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