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War jitters keep mortgage rates down
Mortgage rates continued their downward spiral this week, according to surveys conducted by both Freddie Mac and Bankrate.
In Freddie Mac's weekly mortgage survey, the 30-year fixed-rate mortgage averaged 5.79 percent for the week ended today, down from 5.84 percent last week, and setting still another record low. The 15-year fixed-rate mortgage averaged 5.14 percent this week, down from last week's average of 5.21 percent, also the lowest ever recorded since Freddie Mac started tracking it in 1991. Points on both the 30- and 15-year averaged 0.6.
One-year adjustable-rate mortgages averaged 3.83 percent this week, with an average 0.6 point, up slightly from 3.81 percent last week.
"Debilitating forces, such as looming war clouds in the Mideast, declining consumer confidence and other issues are making an economic rebound difficult," said Freddie Mac Chief Economist Frank Nothaft. "Low rates will continue to keep the housing industry busy this year, and indications are that there is a good chance home sales may set yet another record in 2003."
Fixed mortgage rates fell again this week in the Bankrate.com national survey of large lenders.
Rates on the benchmark 30-year fixed mortgage fell to 5.82 percent this week, a new modern low point, while rates on the 15-year fixed dropped 8 basis points to 5.2 percent, also a modern-day low. Rates on the one-year ARM tumbled 6 basis points to 4.2 percent. A basis point is one-hundredth of a percent.
This is the third week in a row that the 30-year mortgage index has hit a modern-day low. The last time rates were lower was in March 1966, when the average rate on an FHA mortgage was 5.7 percent, according to Bankrate.
War jitters are the main reason mortgage rates moved lower, Bankrate analysts said. Concern over war with Iraq holds businesses back from hiring, pummels consumer confidence and sends investors headed for the safety of Treasury bonds.
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