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In the past few weeks the market has seen average rates on[...]
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U.S. 30-year mortgage rates fell in the week ending Nov. 6, according to a survey released on Thursday by home funding company Freddie Mac. Last weeks survey showed rates climbing at the end of October.
U.S. 30-year mortgage rates dropped to an average of 6.20 percent from 6.46 percent last week. U.S. 15-year mortgage rates also dipped to an average of 5.88 percent from 6.19 percent last week.
One-year adjustable rate mortgages, or ARMs, fell in the week to an average of 5.25 percent from 5.38 percent last week.
Freddie Mac said the “5/1″ ARM, set at a fixed rate for five years and adjustable each following year, fell to an average of 6.19 percent from 6.36 percent a week earlier.
A year ago, 30-year mortgage rates averaged 6.24 percent, 15-year mortgages 5.90 percent and the one-year ARM 5.50 percent. The 5/1 ARM averaged 5.89 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, in a statement.
The Commerce Department reported last week that the economy shrank at a 0.3 percent annual rate in the third quarter, the sharpest contraction in seven years. As fears of a recession grew, consumers cut back on spending, creating the first decline in quarterly spending since the fourth quarter of 1991.
“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,” Nothaft said. “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.”
Lenders charged an average of 0.7 percent in fees and points on 30- and 15-year mortgages, unchanged from last week.
Fees and points averaged 0.4 percent on the one-year ARM, down from 0.6 percent a week ago. The 5/1 ARM had an average of 0.6 percent in fees amd points, down from 0.7 percent last week.
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