Both 30-year fixed-rate mortgages (FRMs) and 15-year FRMs got cheaper over the past week, with 30-year FRMs falling six basis points to land at 4.14% and 15-year FRMs dropping four b.p. to 3.25%. One year ago, 30-year FRMs cost 3.59% and 15-year FRMs averaged 2.77%.
Likewise, 5/1 adjustable-rate mortgages (ARMs) declined in price, falling five basis points to 2.96%. One-year ARMs were unchanged at 2.43% for the third week in a row. A year ago, 5/1 ARMs were at 2.63% and 1-year ARMs at 2.55%.
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Freddie Mac Vice President and Chief Economist Frank Nothaft noted that housing starts were up 13% in April and applications for housing permits rose as well. Both numbers came in above expectations, Nothaft said in a statement. This would ordinarily tend to push mortgage rates up (greater demand for mortgages being expected to raise prices). But with industrial production slipping a gear in April, down 0.6%, homebuyers may still be looking askance at the economy and less willing to commit to a big purchase — depressing demand for mortgages.
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