Bankrate, Freddie Mac: Mortgage rates move little

By Palm Beach Business.com

DELRAY BEACH — Mortgage rates changed little over the past week, and likely aren’t going to change much over the coming week.

Freddie Mac’s Primary Mortgage Market Survey found the  30-year fixed-rate mortgage averaging 4.75 percent with 0.7 point, up from last week’s 4.72 percent.  By comparison, a year ago, the 30-year averaged 5.38 percent.

Bankrate’s national mortgage survey spotted the 30-year averaging 4.88 percent, same as the week before, the all-time low for the survey.

Bankrate said the low rates are a byproduct of ongoing uncertainty about the economy and nervousness among investors. A "flight to quality" among global investors has driven Treasury yields significantly lower, and mortgage rates are closely tied to yields on long-term government debt. As long as there is lingering doubt about the sustainability of the U.S. economic recovery, mortgage rates will remain at near present levels.

The yield on the 10-year Treasury bond fell to 3.21 percent on Thursday, down from 3.33 percent a week earlier.

Low mortgage rates continue to be a lure to bring people into housing market. However, credit remains tight, making entry into the market difficult especially for first-time buyers.

“Mortgage rates were little changed this week amid preliminary signs that the expiration of the homebuyer tax credit in April may have led to a slowdown in new construction ,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Starts on single-family homes fell 17 percent to an annualized pace of 468,000 units in May from April’s 20-month high. In addition, permits on one-unit homes fell to the slowest pace since May 2009. Finally, builders became more pessimistic in their near-term outlook in June, according to the National Association of Home Builders/Wells Fargo Housing Market Index."

Bankrate’s panel of mortgage experts see rates pretty much staying right where they are over the next week. Nearly two-thirds of the panelists say rates are likely to remain unchanged, while the remainder see rates rising. No one sees rates falling.