Freddie Mac yesterday released the latest results of its Primary Mortgage Market Survey, and it found what by now has become common – that average fixed mortgage rates hit record lows last week.
The 30-year FRM averaged just 3.79 for the week ending May 17, a four basis point decline from the 3.83 percent of the week prior and a substantial drop from the 4.61 percent from last year.
Brian Guzman, an agent with Coldwell Banker in Lakeview, said the low interest rates have had an empirical effect on his business.
“My personal business volume has sped up in the second quarter,” Guzman said. “I can definitely attribute the historically low interest rates, along with economic forecasts stating that the interest rate is on the rise.”
Those rates, Guzman continued, have also been a direct appeal to the pent-up demand of prospective homebuyers.
“Clients respond by acting faster to get into a home and lock up an interest rate,” he said. “I have some calls from clients who have purchased recently and are considering another purchase to take advantage of the rates.”
Frank Nothaft, the vice president and chief economist of Freddie Mac, said economic factors oversees played a big part in the declining rates, which occurred despite positive economic news at home.
“The European debt crisis overshadowed improving economic indicators for the U.S. and allowed Treasury bond yields and fixed mortgage rates to ease for another week,” Nothaft said. “For instance, industrial production rose 1.1 percent in April – the largest gain since December 2010 – and consumer sentiment in May rose to its highest reading since January 2008, according to the University of Michigan.”
The 15-year FRM averaged 3.04 percent, down just one basis point from the week before but 75 basis points from last year, when it averaged 3.80 percent. The 5-year ARM, by comparison, averaged 2.83 percent, up by two basis points from the week before but still down 67 basis points from last year. The 1-year ARM, at 2.78 percent, was up by five basis points but down 27 from last year.