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.
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    Ilyce R. Glink is an award-winning, nationally-syndicated columnist, best-selling book author and founder of Best Money Moves, an employee benefit program that helps reduce financial stress. She also owns, where readers can find real estate and personal finance resources.