Freddie Mac released its weekly update on national mortgage rates Thursday morning, and as expected, last week's decision to continue the Fed's $85-billion-a-month bond-buying program, rather than taper off on the purchases, is pushing down interest rates even further, and across the board.
Thirty-year fixed-rate mortgages (FRMs) fell 18 basis points over the past week, to 4.32%, a nine-week low. Fifteen-year FRMs dropped 17 b.p. to 3.37%.
Among adjustable-rate mortgage (ARMs), 5/1 ARMs shed four basis points, falling to 3.07%. One-year ARMs dipped by two b.p. to 2.63%.
Thirty-year mortgages are now at their lowest price since July. Fifteen-year FRMs and 5/1 ARMs haven't been this low since mid-June, although 1-year ARMs did briefly touch similar levels back in early August.
Mortgage rates are still nearly a full percentage point higher than in May, when the Fed first signaled it might slow its $85-billion-a-month in bond buys. A year ago, 30-year fixed-rate mortgages were at 3.4% while 15-year fixed-rate mortgages were at 2.73%.
Commenting on the latest numbers, Freddie Mac Vice President and Chief Economist Frank Nothaft attributed the rate declines to "the Federal Reserve announcement that it will maintain its bond buying stimulus," noting that "these low rates should somewhat offset the house price gains seen the last number of months and keep housing affordability elevated."
Nothaft also said in his statement that rising house prices aren't all bad news: "These increases in home values have also increased homeowner wealth. For example, homeowners experienced an aggregate $1.4 trillion increase in equity in their homes over the first half of this year which contributed to the overall $4.2 trillion gain in household net worth."
-- Material from The Associated Press was used in this report.
