Long-Term Rates Continue to Drop

Mortgage interest rates slipped lower again this week, according to the ""Primary Mortgage Market Survey"":http://www.freddiemac.com/pmms/release.html (PMMS) released Thursday by ""Freddie Mac"":http://www.freddiemac.com. Frank Nothaft, the GSE's VP and chief economist, said that along with the recent moderation in home price declines, lower rates are providing a big boost to the nation's ailing housing market.
Nothaft cited figures from the ""Mortgage Bankers Association"":http://www.mortgagebankers.org (MBA), which show that conventional mortgage applications for home purchases jumped 7.2 percent by the end of June, after the rate for 30-year mortgages dropped a quarter of a percentage point in the latter half of last month.
Freddie Mac reported the average rate for a 30-year fixed-rate mortgage (FRM) is now 5.32 percent (0.7 point). Last week it was 5.42 percent, and last year at this time, the 30-year FRM averaged 6.35 percent.
For the week ending July 2, 2009, the GSE's study shows 15-year FRMs averaged 4.77 percent (0.7 point). The rate for a 15-year FRM last week averaged 4.87 percent. A year ago at this time, it was 5.92 percent.
Five-year adjustable-rate mortgages (ARMs) are currently averaging 4.88 percent (0.7 point), down from last week's average of 4.99 percent. During the same period last year, the 5-year ARM averaged 5.78 percent.
One-year ARMs averaged 4.94 percent this week (0.6 point) - the only loan product in Freddie's study to rise. Last week, the average rate for a 1-year ARM was 4.93 percent, and last year, it was 5.17 percent.