Worsening economic indicators in the past week have driven the average weekly rate for a 30-year fixed-rate mortgage back downward to a new low of 3.66%, according to Freddie Mac’s weekly survey.
That rate is five basis points lower than last week’s average for a 30-year FRM.
During the week ending June 21, the average rate for a five-year Treasury-indexed hybrid mortgage also dropped to a record low of 2.77%. That rate is three basis points lower than last week’s average.
The average 15-year FRM rate and average rate for a one-year Treasury adjustable-rate mortgage also dropped in the most recent week, with the former falling to 2.95% from 2.98% and latter declining to 2.74% from 2.78%.
Average points were 0.7 of a point for 30-year FRMs, 0.6 of a point for 15-year FRMs and five-year Treasury hybrids, and 0.5 of a point for one-year Treasury ARMS.
A year ago, the average 30-year rate was 4.5%, the average 15-year rate was 3.69%, the average five-year Treasury hybrid rate was 3.25% and the average one-year Treasury ARM rate was 2.99%.
More pessimistic recent economic indicators led the Federal Open Market Committee on Wednesday to pledge to keep some existing programs in place that should maintain some downward pressure on both long- and short-term rates going forward, but some observers believe policymakers have not reached the point where they are to layer on yet another program designed to lower rates even further.
“Risks to the outlook have increased enough that the Fed needed to do something, but they haven’t deteriorated enough to the point where they would cross the hurdle for QE3,” said DB Advisors global chief economist Josh Feinman, referring to speculation about a third round of rate-lowering quantitative easing.
He said it is “not impossible” that the Fed would consider another QE moves such as starting to add agency mortgage-backed securities to its balance sheet again rather than just reinvesting the principal of agency securities it already has. But he said a “pretty high hurdle” stands in the way of such an action.