Home mortgage rates fell again to a fresh 2011 low as a week of downbeat jobs data fueled concerns over a possible economic slowdown this year, according to the latest survey from Freddie Mac.
The decline in fixed rates represented the eighth-straight weekly fall and comes after the Bureau of Labor Statistics this week said employers added far fewer private-sector jobs than expected.
"The housing market continues to be fragile across the nation as well," Freddie chief economist Frank Nothaft said, with Federal Reserve data released Wednesday showing weak sales and prices in most districts.
The 30-year fixed-rate mortgage averaged 4.49% in the week ended Thursday, down from 4.55% the prior week and last year's 4.72% average. Rates on 15-year fixed-rate mortgages fell to 3.68% from 3.74% the previous week and 4.17% a year earlier.
Five-year Treasury-indexed hybrid adjustable-rate mortgages fell to 3.28%, from 3.41% last week and 3.91% a year earlier. One-year Treasury-indexed ARM rates decreased to 2.95%, from 3.13% the prior week and 3.91% a year earlier.
To obtain the rates, fixed-rate borrowers required an average payment of 0.7 point, while the adjustable-rate mortgages required a 0.5 point payment. A point is 1% of the mortgage amount, charged as prepaid interest.
Mortgage rates keep dropping but so does new home purchases. Where is the disconnect? You would think people would be jumping all over these rates and buying homes, but why aren't they? Is it because the criteria to get a loan is so much more stringent? Or are people just waiting this recession out? And if thats the case then getting these rates will be too late. In my opinion, I think its simply based on fear. With all thats gone on, in regards to the housing market, in the past 4-5 years, i'm sure we all know someone that has become a victim of the crisis. It's scary out there but how are we going to grow as an economy if we're all hiding our money trying to wait this out? It's us, the middle class that run this country. The top 10% would like you to believe thats false but its not. Without the middle class, there would be no economy. Without credit, there would be no economy. So I say take a chance. This has to be a cumulative effort. Things will always get worse before they get better but its always those who take the big risks that get the big rewards. I'm taking my risks and hopefully it'll pan out. Stay tuned....