Real Estate NewsWeaker Job Market Leads to Lower Mortgage Rates
The 15-year FRM this week averaged 5.88 percent with an average 0.7 point, down from last week when it averaged 6.19 percent. A year ago at this time, the 15-year FRM averaged 5.90 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.19 percent this week, with an average 0.6 point, down from last week when it averaged 6.36 percent. A year ago, the 5-year ARM averaged 5.89 percent.
One-year Treasury-indexed ARMs averaged 5.25 percent this week with an average 0.4 point, down from last week when it averaged 5.38 percent. At this time last year, the 1-year ARM averaged 5.50 percent.
“Mortgage rates fell this week amid new indications of a pullback in consumer spending and a weaker jobs market,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The economy shrank by 0.3 percent in the third quarter, led by the first decline in consumer spending since the fourth quarter of 1991. In September alone, consumer spending fell by the most since June 2004. More recently, job layoffs more than doubled in October compared to September on year-over-year basis."
“With the economy contracting and experiencing record home foreclosures, lenders tightened their credit standards further, according to the October Federal Reserve Senior Loan Officer survey. Approximately 70 percent of banks raised their lending standards for prime mortgages and about 90 percent of banks that offer nontraditional mortgages did so as well.”