Long term mortgage rates showed mild improvement as adjustable-rate mortgages inched higher, according to the latest weekly survey released by mortgage financier Freddie Mac.
Freddie chief economist Frank Nothaft said interest rates on ARMs rose as the Fed signaled there would be no additional rate cuts in the near future, noting that the most recent action could have gone either way.
The average five-year ARM climbed four basis points to 5.61 percent for the week ending May 22, while the one-year averaged 5.24 percent, up from 5.18 percent a week ago.
The traditional 30-year fixed-rate mortgage dipped below six percent to 5.98 percent, down from 6.01 percent last week and the 15-year also improved, falling five basis points to 5.55 percent.
A year ago, the 30-year averaged 6.37 percent, the 15-year 6.06 percent, the five-year 6.02 percent, and he one-year 5.64 percent.
So rates are still historically low, but with falling home prices and little to no equity in most borrower’s homes, many won’t be able to take advantage unless granted a loan modification.
Nothaft noted that the housing crisis is still in full effect, citing poor construction and homebuilder confidence numbers, along with reports of falling home prices and soft mortgage application volume.
(photo: jamescridland)
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