(MoneyWatch) Mortgage rates have fallen again to new record lows, according to Freddie Mac's Primary Mortgage Market Survey (PMMS) released Thursday. The previous record for a 30-year fixed-rate mortgage (FRM) was set on Feb. 9, 2012, when rates reached 3.87 percent. The 15-year FRM average reached its previous all-time low on April 12, 2012, with rates averaging 3.11 percent.
Mortgage rates for the week ending May 3, 2012 are as follows:
- 30-year FRM averaged 3.84 percent this week, down from last week's average of 3.88 percent. At this time last year, the average was 4.71 percent.
- 15-year FRM averaged 3.07 percent this week. That's down from last week's average of 3.12 percent, and significantly lower than last year's average of 3.89 percent.
- 5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.85 percent this week, unchanged from last week's average. A year ago, the average was 3.47 percent.
- 1-year Treasury-indexed ARM rates averaged 2.70 percent this week, down slightly from last week's average of 2.74 percent. At this time last year, the 1-year ARM averaged 3.14 percent.
According to Freddie Mac, the low rates will help keep homebuyer affordability high.
"Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week," Frank Nothaft, vice president and chief economist at Freddie Mac, said in a press release Thursday.
"Real Gross Domestic Product rose at an annualized rate of 2.2 percent in the first quarter of this year, down from the previous quarter of 3.0 percent and below the market consensus forecast of 2.5 percent," Nothaft continued. "In addition, the 12-month growth in the core price index of personal consumption expenditures was 2.0 percent in March which matches the Federal Reserve's implied inflation target."
Low mortgage rates are great news for consumers looking to buy homes, but the fact that those rates are based on slowing economic growth is something no one wants to hear. Until people feel good about where the economy is going and secure in their jobs, it's unlikely home sales will pick up dramatically.
If consumers are afraid to spend money for fear they'll lose it forever, they're not going to buy homes -- no matter how low the interest rates go.