Washington Post, Saturday, May 15, 2010
Mortgage rates fell this week to the lowest level of the year. The drop was caused by a high demand for U.S. government securities, which closely track mortgage rates, as investors fled risky European debt.
The average rate on a 30-year fixed rate mortgage dipped to 4.93 percent this week from 5 percent a week earlier, Freddie Mac said Thursday. It was the lowest level since mid-December, when rates averaged 4.81 percent.
“In times of nervousness, everybody seeks the safe haven,” said Greg McBride, senior financial analyst at Bankrate.com.
The average rate on a 15-year fixed-rate mortgage was 4.3 percent, down from 4.36 percent last week.
Rates on five-year, adjustable-rate mortgages averaged 3.95 percent, down from 3.97 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.02 percent from 4.07 percent.
The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.
The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 of a point for 30-year loans and 0.6 of a point for 15-year, 5-year and 1-year loans.
Home sales gained in March as buyers took advantage of a tax credit of as much as $8,000 that required recipients to sign contracts by April 30.
New home sales surged 27 percent in March, the biggest gain since recordkeeping began in 1963, according to the Commerce Department. An index of signed purchase agreements for previously owned homes rose 5.3 percent in March, the National Association of Realtors said this month.
The Mortgage Bankers Association’s index of mortgage applications rose 3.9 percent in the week that ended May 7. The portion of refinancings climbed 15 percent. Applications to buy fell 9.5 percent.
Home prices rose in 91 U.S. metropolitan areas in the first quarter compared with a year earlier, the Realtors’ group said this week.
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