Mortgage rates eased this week as comments from Federal Reserve Chairman Ben Bernanke and lukewarm market indicators provided some drag.
[IMAGE]According to ""Freddie Mac's"":http://www.freddiemac.com/ Primary Mortgage Market Survey, the average 30-year fixed rate was 4.37 percent (0.7 point) for the week ending July 18, down from 4.51 percent last week. Last year at this time, the 30-year fixed-rate mortgage (FRM) averaged 3.53 percent.
The 15-year FRM averaged 3.41 percent (0.7 point), down 12 basis points week-over-week from 3.53 percent.
Meanwhile, the 5-year Treasury-index hybrid adjustable-rate mortgage (ARM) averaged 3.17 percent (0.6 point) [COLUMN_BREAK]
this week, a drop from 3.26 percent. The 1-year ARM averaged 2.66 percent (0.4 point), flat from week to week.
""Fixed mortgage rates fell as Federal Reserve (Fed) Chairman Bernanke helped ease market concerns about the Fed reducing its bond purchases,"" said Freddie Mac chief economist Frank Nothaft, referencing remarks made in July in which Bernanke indicated that a ""highly accommodative monetary policy"" is still necessary at this time.
Nothaft also pointed to indications of a slowdown in the economic recovery, including drops in consumer sentiment and housing starts and a disappointingly small increase in retail sales.
""Bankrate.com"":http://www.bankrate.com/ also reported a decline in interest rates in its weekly national survey. According to the site, 30- and 15-year fixed rate averages each dropped 10 basis points to 4.56 percent and 3.65 percent, respectively. At the same time, the 5/1 ARM declined 7 basis points to 3.56 percent.
""Weaker economic data increases the odds the Federal Reserve holds off tapering their bond-buying stimulus,"" Bankrate said. ""And further easing the upward pressure on interest rates this week were comments from Fed Chairman Ben Bernanke, who emphasized in an appearance before Congress that the tapering is not set in stone and the Fed is very adaptable to incoming economic data.""