Fixed Rate Averages Drop Despite Economic Improvements

Fixed mortgage rates slipped further down, maintaining their near-record low averages despite evidence of an improving economy, according to ""Freddie Mac's"":http://www.freddiemac.com/ Primary Mortgage Market Survey.

[IMAGE]

""The Fed stated that it expects economic growth to remain moderate and then pick up gradually. In addition, it noted that labor market conditions have improved in recent months and it anticipates the unemployment rate will decline gradually,"" said Frank Nothaft, VP and chief economist for Freddie Mac.

Nothaft also mentioned the FHFA house price index, which showed a 0.3 percent monthly increase for February, and the S&P/Case-Shiller 20-city indexes, which showed 12 out of 20 metropolitan areas saw monthly gains.

[COLUMN_BREAK]

Still, even with the signs of improvement, Nothaft mentioned one caveat from the Fed: the housing sector still remains depressed.

The 30-year fixed-rate mortgage, which has been below 4 percent every week in 2012 except one so far, averaged 3.88 percent (0.7 point), a drop from last week's average of 3.90 percent. The 30-year rate was 4.78 percent last year at this time.

The 15-year fixed rate mortgage averaged to 3.12 percent (0.6 point), down from last week when it averaged 3.13 percent. The 15-year averaged 3.97 percent last year during this week.

The 5-year ARM averaged 2.85 percent this week, with an average 0.6 point, up from last week when it averaged 2.78 percent. A year ago, the 5-year ARM averaged 3.51 percent.

The 1-year ARM dropped to 2.74 percent (0.6 point) this week compared to last week's 2.81 percent. At this time last year, the 1-year ARM was 3.15 percent.

Bankrate's fixed rate averages also coincided with Freddie Macs, with both the 30- and 15-year rates showing a decrease. The 30-year fixed was 4.09 percent, down slightly from 4.10 percent last week. The 15-year fixed averaged 3.28 percent, dropping from last week's 3.32 percent.

Bankrate's weekly survey pulls data provided by the top 10 banks and thrifts in the top 10 markets.