RISMEDIA, August 6, 2007–(MarketWatch)–Mortgage rates moved down slightly this week, aided by lower bond yields, Freddie Mac’s chief economist said on Thursday.
“Market investors seeking safety from the subprime fallout bought Treasury securities, pushing bond yields down and allowing mortgage rates to drift a bit lower,” said Frank Nothaft, Freddie Mac chief economist, in a news release.
The 30-year fixed-rate mortgage averaged 6.68%, down from last week’s 6.69%, according to Freddie Mac’s weekly survey. The mortgage averaged 6.63% a year ago.
The 15-year fixed-rate mortgage averaged 6.32%, down from last week’s 6.37%. The mortgage averaged 6.27% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 6.29%, down from last week’s 6.30%. The hybrid averaged 6.27% a year ago. One-year Treasury-indexed ARMs averaged 5.59%, down from last week’s 5.69%. The ARM also averaged 5.69% a year ago.
To obtain the rates, the 30- and 15-year fixed-rate mortgages required payment of an average 0.3 point, while the 5- and 1-year ARMs required payment of an average 0.5 point. A point is 1% of the mortgage amount, charged as prepaid interest.
In his comments, Nothaft pointed out that while sales of new and existing homes fell in June and home prices continue to weaken, there are early signs that the housing market is stabilizing.
“As construction spending levels off, the drag on GDP growth will continue to diminish. Meanwhile, the 5% rise in pending home sales in June suggests that sales in July and August may reverse last month’s decline,” he said.
According to a separate survey released on Wednesday by the Mortgage Bankers Association, the volume of applications for mortgages slipped 0.3% last week compared with the week before.
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