Mortgage rates dropped to another record low at 4.42% for the week, the ninth straight week the 30-year fixed rate mortgage has moved lower or stayed the same, according to Freddie Mac. The 5-year adjustable rate mortgage remained at the same rate it was a week ago.
The 30-year mortgage moved down just .02% for the week from 4.44%. The rate is the lowest it has been in the 39 years Freddie Mac has been keeping track of the mortgage. The 15-year fixed rate mortgage also moved .02% lower for the week to 3.9%. A year ago the same mortgage was at 4.56%.
Despite the decline in rates, the housing market has fallen into a sort of late summer slump due to the expiration of the federal government’s home buyers tax credit and weak consumer confidence. “Single-family starts fell for the third straight month in July to an annual pace of 432,000 homes, the fewest since May 2009,” said Fannie Mae deputy chief economist Amy Crews Cutts.
“In addition, homebuilder confidence fell for the third consecutive month in August to the lowest since March 2009, according to the NAHB/Wells Fargo Housing Opportunity Index. Even confidence among Realtors was at a 16-month low in June, according to the National Association of Realtors®.”
Investors in long-term bonds, however, appear to be gaining confidence that inflation will remain in check as a result of long-term fixed mortgage rates continuing to fall. The Consumer Price Index also indicates that current inflation is low. The 12-month growth in the core consumer price index has held at only 0.9% for four straight months ending in July. The last time price growth was this low was in 1966.