Mortgage rates dropped this week another seven-one-hundredths of a point to an average of 4.84% down from last week on a conventional 30-year home mortgage, according to Freddie Mac. The national average was just two-one-hundredths of a point above year ago near record low interest rates.
Mortgage rates have hovered at or below the 5% rate for more than two months. But the 30-year rate has not been lower than it is now since last December when it was at 4.81%. Applications for home mortgages dropped a slight 1.5% last week on a seasonally adjusted basis, according to the Mortgage Bankers Association.
Applications for refinancing continue to remain strong, increasing 14.5% over last week. But purchases dropped 27.1% from a week ago, demonstrating a drop in home sales after the federal buyers tax credit expired. Home sales are widely anticipated to slow broadly after the government credit was withdrawn from the market as an incentive for home buyers.
“Mortgage rates eased back once again this week to the lowest level of the year,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Low mortgage rates, coupled with the home buyer tax credit, helped strengthen the housing market in the first four months of the year. New construction on one family homes rose for the fourth consecutive month in April to an annualized rate of nearly 0.6 million units and represented the strongest pace since August 2008.”
“Purchase applications plummeted 27% last week and have declined almost 20% over the past month, despite relatively low interest rates,” said Michael Fratantoni, the Mortgage Bankers Association head of research and economics. “This drop occurred even as rates on 30-year fixed-rate mortgages continued to fall.”
A 15-year mortgage averaged 4.24% this week at an average of 0.7 point, down from last week when it averaged 4.3%. A year ago at this time, the 15-year fixed-rate-mortgage averaged 4.5%. The 15-year has not been lower since Freddie Mac started tracking it in 1991.