By Kevin Chiu
Nearly budging, mortgage rates slipped a single basis point for the week to an average of 4.11% on a fixed 30-year mortgage, according to Freddie Mac. The rate on the same home loan averaged 4.12% last week.
The marginal slip on the benchmark 30-year loan is hardly an indicator that rates are moving anywhere substantially any time soon as the Fed buys billions of dollars in additional mortgage backed securities to keep pressure on rates, and provide the possibility that the economy, including the housing market will stabilize.
The fixed 15-year rate mortgage, however, rose by a single basis point to average 3.38% with 0.8 point, up from 3.37%. A year ago the same loan was 3.64%, while the 30-year fixed was 4.21%. Mortgage interest rates hit their lowest level of all-time three weeks ago, and may never see those rates again.
The National Association of Homebuilders index saw a four point jump for the month, the largest improvement since April 2010. “Housing starts sprang up 15% in September, largely driven by a spike in multifamily starts to a level last seen in 2008,” said Freddie Mac chief economist Frank Nothaft. “Building permits on five or more unit buildings fell by 13%, however, suggesting that the multifamily building pickup may be temporary.”
The huge increase in multi-family starts is mainly for apartment buildings needed for former homeowners to move into after being foreclosed from their homes as contractors build more apartment units for renters.
Single family starts represented just 1.7% of the increase for the month.
Consumer sentiment was down during October, according to the Thompson Reuters-University of Michigan survey. However, the Federal Reserve says economic activity in the U.S. expanded in October, but expressed doubts about the outlook for the future.
Mortgage rates on the Treasury indexed hybrid adjustable rate loan also saw a modest fall this week, averaging 3.01%, down from 3.06% a week earlier. The 1-year ARM averaged 2.94%, up four basis points from a week ago.