Both 30-year fixed-rate mortgages (FRMs) and 15-year FRMs got more expensive over the past week, with 30-year FRMs rising two basis points to return to the 4.14% level of two weeks ago, and 15-year FRMs likewise adding two b.p. to rise to 3.23%. One year ago, 30-year FRMs averaged 3.91%, and 15-year fixed-rate mortgages averaged 3.03%.
Adjustable-rate mortgages (ARMs), on the other hand, got cheaper in the most recent week. 5/1 ARMs dropped three basis points to 2.93%. 1-year ARMs slipped a single b.p., falling to 2.40%. A year ago, 5/1 ARMs were at 2.74%, and 1-year ARMs at 2.58%.
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Freddie Mac vice president and chief economist Frank Nothaft noted in a statement that the modest but inconsistent movements in rates — some up, some down — came during a week of little real rate-moving economic news: “Of the few releases, real GDP was revised down to -1.0% growth in the first quarter of 2014. ADP Research Institute estimated the private sector added 179,000 jobs in May, which followed a slight downward revision of 5,000 jobs in April. Meanwhile, the Institute for Supply Management reported the manufacturing industry saw a slight acceleration in monthly growth for May.”
On balance, the limited news is probably a slight negative for the economy. If things get worse, expect rates to resume their downward slide.
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