According to Freddie Mac, the 30-year fixed-rate mortgage averaged 5.38 percent for the week ending June 18, 2009, down from last week when it averaged 5.59 percent. This is still a far cry from last year when the 30-year fixed rate mortgage averaged 6.42 percent.
The 15-year note was also down this week, averaging 4.89 percent. A year ago at this time, the 15-year note was a lofty 6.02 percent.
“Reports of benign inflation figures reversed the upward trend of mortgage rates this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The producer price index rose only 0.2 percent in May, roughly a third less than the consensus forecast and the consumer price index increased by just 0.1 percent. Moreover, the 12-month drop of 5.0 percent in producer prices was the largest since 1949 and the 1.3 percent yearly decrease in consumer prices the biggest since 1950.”
“It’s still too early to tell whether the decline in housing market activity has hit bottom yet. The prior three-week run up in rates for 30-year fixed mortgages, which amounted to over 0.75 percentage points, is starting to slow homebuyer demand, at least temporarily. Mortgage applications for home purchases fell for the first time in four weeks, slipping 3.5 percent for the week ending June 12th, according to the Mortgage Bankers Association. In addition, although new construction of one-family homes rose for the third consecutive month in May by 7.5 percent, and the National Association of Home Builders reported that homebuilder assessments of market conditions in June and for the remainder of this year had weakened.”
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