The Consolation to Grim Economic Reports

June 09, 2012

The economy is struggling and mortgage rates are responding.

arrow downAverage fixed-rate mortgages fell to new all-time record lows for the sixth straight week in an effort to help keep homebuyer affordability high.

Here are the mortgage rates for the week ending June 7, according to Freddie Mac:

*30-year fixed-rate mortgage (FRM): Averaged 3.67 percent, down from last week when it averaged 3.75 percent. Last year at this time, the 30-year FRM averaged 4.49 percent.

*15-year FRM: Averaged 2.94 percent, down from last week when it averaged 2.97 percent. A year ago at this time, the 15-year FRM averaged 3.68 percent.

*5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM): Averaged 2.84 percent, the same as last week. A year ago, the 5-year ARM averaged 3.28 percent.

*1-year Treasury-indexed ARM: Averaged 2.79 percent, up from last week when it averaged 2.75 percent. At this time last year, the 1-year ARM averaged 2.95 percent.

Frank Nothaft, vice president and chief economist of Freddie Mac, lists the many reasons for the economic downturn.

“Fixed mortgage rates reached new record lows for the sixth consecutive week as long-term Treasury bond yields declined further following downwardly revised economic growth and job creation data. Gross domestic product rose 1.9 percent in the first quarter, after originally being reported as 2.2 percent, led by gains in inventories, more government cutbacks and the slowest increase in corporate profits in over three years. In addition, the economy added 69,000 jobs in May, less than half of the market consensus forecast and revisions subtracted a total of 49,000 workers in March and April. Lastly, the unemployment rate ticked up from 8.1 percent in April to 8.2 percent.”

With all those struggling numbers, will record-low mortgage rates be enough to spur housing activity? Well, at least they won’t hurt.

Categories: Economy, Mortgages

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