Mortgage rates finally broke their holding pattern this week, pulling back as reports demonstrated the housing market's ongoing strength and the global economy's precariousness.[IMAGE]
According to ""Freddie Mac's"":http://www.freddiemac.com/ Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 3.51 percent (0.8 point) for the week ending February 28, dropping from 3.56 percent previously. Last year at this time, the 30-year FRM averaged 3.90 percent.
The 15-year fixed average also dropped, though more modestly--the average rate fell to 2.76 percent (0.8 point) from 2.77 percent last week.
Adjustable rates also fell. According to Freddie Mac's metrics, the 5-year hybrid adjustable-rate mortgage (ARM) averaged 2.61 percent (0.6 point), down from 2.64 percent. Meanwhile, the 1-year ARM fell a single basis point, settling at 2.64 percent (0.4 point).
""Mortgage rates eased somewhat as the consumer price index in February held steady for the second month in a row. House price indicators, however, showed gains in 2012,"" explained Frank Nothaft, VP and chief economist for Freddie Mac. ""The ""S&P/Case-Shiller"":http://www.themreport.com/articles/case-shiller-indexes-at-fastest-gain-in-6-plus-years-2013-02-26 national home price index rose 7.3 percent last year, reflecting the largest four-quarter growth since the third quarter of 2006. This, in part, was a driving force that pushed up the number of existing and new home sales in February to the highest levels since July 2007 and July 2008, respectively.""
In a release, Freddie Mac noted that low rates should continue to help drive the housing recovery as the market heads into the spring homebuying season.
""Bankrate.com's"":http://www.bankrate.com/ weekly national survey showed rates falling to five-week lows. According to Bankrate, the 30-year fixed average fell to 3.73 percent this week, a decline of 7 basis points from last week. The average 15-year fixed rate fell to 2.96 percent, slipping below the 3 percent mark after spending a month hovering above it.
Adjustable rates were also lower, with the 5/1 ARM dropping from 2.76 percent last week to 2.68 percent this week.
""Mortgage rates decline following concerns about the global economy and Federal Reserve Chairman Ben Bernanke's reassurances that stimulative bond-buying will continue,"" Bankrate said. ""Mortgage rates had moved modestly higher in recent weeks on worries that the Fed would prematurely curtail their purchases of long-term bonds, but Bernanke cast those notions aside.""
Most of the analysts surveyed for Bankrate's ""Rate Trend Index"":http://www.bankrate.com/news/rate-trends/mortgage.aspx agreed, with 46 percent anticipating further declines next week. The rest were split, with 27 percent forecasting an increase and 27 percent expecting rates to stay flat.