Thursday, March 4, 2010
by Broderick Perkins
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Deadline Newsroom - Mortgage interest rates slipped below 5 percent again, falling to 4.97 percent for the average interest rate on a 30-year, fixed-rate mortgage (FRM). The rate was down from last week's 5.05 percent average, according to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS).
Even lower rates have meant nothing special for home buyers.
For the week ending March 4, the rate includes an average 0.7 point. Last year, at this time, the 30-year FRMaverage was 5.15 percent.
The 30-year FRM's record low average, 4.71 percent, was posted Dec. 3, 2009 as the lowest conforming loan rate since Freddie Mac began its weekly survey in 1971.
Historically low interest rates, along with rolled-back home prices and unprecedented government assistance programs have made for greater affordability.
Unfortunately, those potentially positive market factors continue to collide with other conditions that undermine the confidence of consumers who might otherwise buy a home.
New, existing home sales plummet
New homes - The seasonally adjusted annual rate of new home sales plummeted 11.2 percent to 309,000 in January this year, compared with 348,000 in December, according to the U.S. Census Bureau. It was the lowest rate since the government began keeping records in 1963 -- almost 50 years ago -- and comes after declines in November and December.
Existing homes - Likewise, from November to December, resale home sales plummeted nearly 17 percent, the largest month-to-month decline in 42 years.
The December to January existing home sales fell another 7.2 percent according to the National Association of Realtors, but the sales rate in January was 11.5 percent above sales from January 2009.
"Still, the latest monthly sales decline is not encouraging, and raises concern about the strength of a recovery.” said Lawrence Yun, NAR chief economist.
More rate declines
The 15-year FRM this week, averaging 4.33 percent, also fell from last week's 4.40 percent average. The rate carried an average 0.7 point. A year ago the 15-year FRM averaged 4.72 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.11 percent the week ending March 4, with an average 0.6 point, again, down from 4.16 percent from last week. A year ago, the 5-year ARM averaged 5.08 percent.
The 1-year Treasury-indexed ARM averaged 4.27 percent this week with an average 0.6 point, up from last week's 4.15 percent average, according to Freddie Mac. Last year, at this time, the 1-year ARM averaged 4.86 percent.
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