Interest rates on home loans continued their downward trend this week, marking the third straight week that they've headed lower.
""Mortgage rates saw an overall improvement this week. Interest rates for 30-year fixed mortgages were almost 0.2 percentage points below this year's high set just three weeks ago,"" explained Frank Nothaft, Freddie Mac's chief economist. ""This means that homebuyers could now expect to pay $263 less per year on a $200,000 loan.""
According to Freddie Mac's national survey, the average rate on a 30-year fixed mortgage came in at 4.87 percent (0.7 point) for the week ending March 3, 2011. That's down from 4.95 percent last week and below the 4.97 percent average reported at this time last year.
The GSEÃ¢â‚¬â„¢s study also showed that the 15-year fixed-rate mortgage fell, from 4.22 percent last week to 4.15 percent
(0.7 point) this week. Stepping back 12 months, the 15-year rate was averaging 4.33 percent, Freddie says.
Adjustable-rate mortgages (ARMs) also posted week-to-week declines. The 5-year ARM dropped from 3.80 percent to 3.72 percent (0.6 point), while the 1-year ARM slid from 3.40 percent to 3.23 percent (0.6 point).
Freddie MacÃ¢â‚¬â„¢s survey is based on data gathered from about 125 lenders across the country. A separate study by Bankrate, whose results are derived from data provided by the top 10 banks and thrifts in the top 10 U.S. markets, also showed broad-based declines in mortgage rates.
According to BankrateÃ¢â‚¬â„¢s survey, the benchmark conforming 30-year fixed mortgage rate dropped back to 5.03 percent (0.42 point). ThatÃ¢â‚¬â„¢s down 6 basis points from 5.09 percent last week.
The average 15-year fixed mortgage also slipped 6 basis points, from 4.37 percent to 4.31 percent (0.38 point), while the larger jumbo 30-year fixed rate fell from 5.67 percent to 5.60 percent.
Adjustable rate mortgages were also lower in BankrateÃ¢â‚¬â„¢s report, with the average 5-year ARM sliding to 3.85 percent and the 7-year ARM plunging to 4.23 percent.
Bankrate also polls a panel of mortgage experts each week to gauge which direction they think rates will head over the next seven days.
Half of the panelists expect mortgage rates to continue the retreat. More than one-third Ã¢â‚¬" 37 percent Ã¢â‚¬" don't see much movement out of mortgage rates over the next week, and just 13 percent predict they'll move higher.