Mortgage rates keep falling
(MoneyWatch) Mortgage rates continued to fall this week, dropping back to rates not seen since the summer, according to Freddie Mac.
The 30-year fixed-rate mortgage dropped to 4.22 percent from 4.32 percent last week, and the 15-year FRM dropped to 3.29 percent from 3.37 percent last week.
Economic uncertainty, coupled with both the government shutdown and the Federal Reserve's decision to wait a little longer before tapering its bond-buying program, helped deflate rates that recently peaked at 4.57 percent for a 30-year FRM and 3.59 for the 15-year FRM.
Frank Nothaft, vice president and chief economist for Freddie Mac, attributed the decline to the federal government shutdown and waning consumer confidence.
"Moreover, a recent Bloomberg survey of professional forecasters suggests that a partial federal shutdown lasting one week would shave 0.1 percentage points off GDP growth in the fourth quarter and even more if the shutdown lasts longer," Nothaft said in a release.
The shutdown only casts more doubt on the economic outlook, which already wasn't looking rosy last month, when the Federal Reserve decided to maintain the pace of its bond-buying program.
The Fed has been buying $85 million in bonds every month, a stimulus move that has helped keep interest rates at record lows.
In mid-September, the Fed postponed an expected reduction of the stimulus program because the economy hadn't grown as much as predicted.
Here are interest rates for the week ending Oct. 3:
- The 30-year FRM averaged 4.22 percent with an average 0.7 point for the week. A year ago at this time, the 30-year FRM averaged 3.36 percent.
- The 15-year FRM this week averaged 3.29 percent with an average 0.7 point. A year ago at this time, the 15-year FRM averaged 2.69 percent.
- The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.03 percent this week with an average 0.6 point, down from last week when it averaged 3.07 percent. A year ago, the 5-year ARM averaged 2.72 percent.
- The 1-year Treasury-indexed ARM averaged 2.63 percent this week with an average 0.4 point, unchanged from last week. At this time last year, the 1-year ARM averaged 2.57 percent.
