(MoneyWatch) Mortgage rates have once again reached new lows, according to Freddie Mac's Primary Mortgage Market Survey (PMMS) released Thursday. Both 30-year fixed and 5-year adjustable rates fell amid worsening economic indicators.
On Tuesday, Zillow reported 30-year fixed mortgage rates averaging 3.48 percent.
The results of Freddie Mac's PMMS for the week ending June 21, 2012 are as follows:
- The average for a 30-year fixed rate mortgage (FRM) was 3.66 percent, down from last week's average of 3.71 percent. At this time last year, the average for a 30-year FRM was 4.50 percent.
- The 15-year FRM averaged 2.95 percent this week, down from last week when it averaged 2.98 percent. One year ago, the 15-year FRM averaged 3.69 percent.
- A 5-year Treasury-indexed adjustable-rate mortgage (ARM) averaged 2.77 percent this week, down from last week's average of 2.80 percent. A year ago at this time, the 5-year ARM averaged 3.25 percent.
- The 1-year Treasury-indexed ARM averaged 2.47 percent this week, down from last week when it averaged 2.78 percent. Last year at this time, the 1-year ARM averaged 2.99 percent.
"Treasury bond yields eased somewhat this week on some worsening economic indicators bringing mortgage rates back into record low territory. Industrial production fell in two of the last three months ending in May, and below the expected market consensus forecast," Frank Nothaft, vice president and chief economist at Freddie Mac, said in a press release. "In addition, consumer sentiment fell in June to its lowest level this year, according to the University of Michigan survey. In its June 20 monetary policy announcement, the Federal Reserve also noted growth in employment has slowed in recent months and household spending appears to be rising at a somewhat slower pace."
"However," Nothaft noted, "there were also some positive indicators on the housing market. Construction on one-family homes rose for the third consecutive month in May to an annualized pace of 516,000. Furthermore, homebuilder confidence rose in June to its highest reading in over five years."
Erin Lantz, director of Zillow Mortgage Marketplace, believes the low rates are here to stay for a while. "Over the past couple of weeks, even ostensibly significant events like the Greek election of the Spanish bailout have failed to push rates outside the current range for an extended period of time," Lantz said in a press release. "So, with limited economic news or international events scheduled for this coming week, we think this inertia will remain, keeping rates within the historically low range we've enjoyed for the past month."