By Mike Colpitts
Uncertainty over the U.S. economy and lower rates paid to investors on U.S. Treasuries sent mortgage rates lower for the week, hitting 3.88% on a 30-year fixed rate mortgage, which is just one basis point off of its all-time record low, according to Freddie Mac.
Rates have now been under 4% for all but one week this year on the bench mark 30-year fixed rate mortgage.
Mortgage rates have also been at their lowest levels in U.S. history since the beginning of the year. The 15-year fixed rate mortgage averaged 3.12%, down a single basis point from last week.
“Fixed mortgage rates held near record lows this week as the markets waited for the Federal Reserve’s April 25th monetary policy announcement following two days of deliberations,” said Freddie Mac chief economist Frank Nothaft. “The Fed stated that it expects economic growth to remain moderate and then pick up gradually.”
Nothaft said that the U.S. housing market has shown some improvement, with the Federal Housing Finance Agency purchase only price index rising 0.3% during the month of February. However, government statistics are notorious for being in error when it comes to the housing market and other indicators, and are often criticized for being too old to matter.
Weak home re-sales reported by the National Association of Realtors during March, which were lower for four straight months and lower new home sales for two months in a row reported by the National Association of New Homebuilders paint a different story.
The 5-year adjustable rate indexed hybrid mortgage averaged 2.85% for the week, an increase from 2.78% last week, according to the giant mortgage lender. Only about 5% of all mortgage borrowers are selecting adjustables as a result of the near record low rates on fixed rate loans.