The mortgage market sure didn’t take its cue from last week’s mostly positive economic news, as mortgage rates ratcheted downward and bond prices advanced, according to the BankingMyWay Weekly Mortgage Rate Tracker.
Even mortgage professionals must be scratching their heads these days. Housing starts showed gains last week, although the disproportionally high number of multi-family homes may have skewed the numbers. In addition, the Philadelphia Federal Reserve posted its second consecutive positive economic index, and jobless claims were down. There’s a growing sense out there now by economists that if you have kept your job, you’ve successfully dodged the recession bullet. Few economists expect companies to continue cutting staff at this point.
Taken together, all of this positive economic news should be driving mortgage prices upward, and the price of houses upward, to boot. But that’s just not happening.
For the week, the BankingMyWay Tracker found that 30-year fixed-rate mortgages fell to 5.15% from 5.22%. Meanwhile, 15-year fixed-rate mortgages slid to 4.66% from 4.785% - that’s the lowest rate range for 15-year mortgages in recorded history, according to Fannie Mae (Stock Quote: FNM) (although the government-supported lender only began tracking 15-year rates in 1991).
On the variable-rate side, adjustable-rate mortgages fell backward, too; with one-year rates falling to 4.6% from 4.99% and three-year rates plummeting to 4.6% from 5.01%. Five-year ARMS backtracked to 4.54% from 4.85% for the week.
For the record, September is shaping up to be a mortgage borrower’s favorite month, as rates have generally slid southward of late. Thirty-year fixed rates are averaging roughly one full percentage point lower than they did a year ago at the same time.