Freddie Mac: Bankrate: Mortgage rates fall on economy

By Palm Beach Business.com

DELRAY BEACH — Perceptions of a slowing economy helped push mortgage rates to a new low for the year.

Freddie Mac’s Primary Mortgage Market Survey found the 30-year fixed-rate mortgage dropping to an average of 4.61 percent with 0.7 point, compared with 4.63 percent a week ago. It was the fifth consecutive week that rates dropped.

Meanwhile,  Bankrate’s national mortgage survey found the 30-year at 4.77 percent with 0.40 point, down from 4.82 percent a week ago.

"Fixed mortgage rates inched down for the fifth consecutive week as financial markets try to ascertain the current strength of the economy,” Freddie Mac Chief Economist Frank Nothaft said. “Industrial production was unchanged in April owing to disruptions in automobile parts supplies due to the earthquake and tsunami in Japan. Netting out automobiles and gasoline, retail sales rose 0.2 percent in April, which was less than a third of the increase in March and the weakest growth since December 2010. However, consumer confidence, as measured by the University of Michigan, rose above the market consensus in May to the highest reading since February.”

Said Bankrate: “Loss of momentum in the economic recovery, and worries that the economy could slow further once the Fed stops pumping money into the markets via bond purchases, has investors nervous. Nervous investors are usually good news for mortgage shoppers, as they gravitate into safe-haven Treasury securities to which mortgage rates are closely related. This has helped keep fixed mortgage rates at historic lows and within striking distance of the all-time lows that were established in November 2010. “

Also from the surveys, the 15-year fixed-rate mortgage dropped to 3.80 percent with 0.7 point, down from 3.82 percent a week ago, according to Freddie Mac, and to 3.95 percent with 0.34 point from 4.00 percent a week ago.