Mortgage Rates Hold Steady at Record Lows

Fri, Jun 18, 2010


By: Brittany Dunn

Still lingering near record lows, mortgage rates for the week ending June 17, 2010 were fairly level with last week’s averages, Freddie Mac and Bankrate reported Thursday.

According to Freddie Mac’s Primary Mortgage Market Survey fixed-rate mortgages averaged 4.75 percent with an average 0.7 point this week, up slightly from last week’s average of 4.72 percent. In addition, Freddie Mac said 15-year fixed-rate mortgages averaged 4.2 percent with an average 0.7 point this week, a minor uptick from 4.17 percent the week prior.

“Mortgage rates were little changed this week amid preliminary signs that the expiration of the homebuyer tax credit in April may have led to a slowdown in new construction,” said Frank Nothaft, Freddie Mac VP and chief economist.

In its June 2010 Economic Outlook, Freddie Mac said mortgage rates are expected to move up more gradually than in last month’s outlook, largely remaining in a 4.75

percent to 5.25 percent range for the second half of 2010 – very much like the first half of this year. These sustained low mortgage rates will help maintain homebuyer affordability and prolong the current refinancing wave, Freddie Mac explained.

In a separate report, Bankrate reported the same trend of relatively flat mortgage rates this week. The tracking company said these record low rates are the byproduct of ongoing uncertainty about the economy and nervousness among investors.

“A ‘flight to quality’ among global investors has driven Treasury yields significantly lower, and mortgage rates are closely tied to yields on long-term government debt,” Bankrate said. “As long as there is lingering doubt about the sustainability of the U.S. economic recovery, mortgage rates will remain at near present levels.”

According to Bankrate’s weekly national survey, which is conducted from data provided by the top 10 bank and thrifts in the top 10 markets, 30-year fixed-rate mortgages averaged 4.88 percent with an average 0.48 point this week, unchanged from last week. Additionally, the tracking company found that 15-year fixed-rate mortgages averaged 4.32 percent with an average 0.49 point this week, nudging down from last week’s average of 4.33 percent.

Complementing Bankrate’s survey is its weekly Rate Trend Index, in which mortgage experts predict which way rates are headed over the next week. The majority of panelists – 65 percent – said mortgage rates have bottomed and will remain more or less unchanged over the next seven days. The remaining 35 percent said rates will likely rise in the coming week.

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