Lack of confidence in the economy, particularly in the dollar, has mortgage rates slipping back again this week, as lenders mull over more data that indicate talk of an economic recovery could be premature.
Adding more anxiety to the mix are potential financial troubles at the Federal Housing Administration and more disturbing news on U.S. home sales.
Let’s go right to the numbers. Rates declined across the board, with the exception of one-year adjustable-rate mortgages — that number rose to 4.75% from 4.4% last week, as measured by the BankingMyWay Weekly Mortgage Rate Tracker.
Back up at the top of the scale are 30-year fixed-rate mortgages, which shaved a few basis points, to 5.15% from 5.2% for the week. Fifteen-year mortgages slipped to 4.54% from 4.6%.
Three- and five-year ARMs also fell to 4.59% from 4.65%, and to 4.54% from 4.6%, respectively.
Increased activity in the mortgage market was a given, anyway, as the Dec. 1 deadline for the $8,000 new home tax credit draws closer. Congress may well extend the deadline, but aggressive mortgage customers are taking nothing for granted. The Mortgage Banker’s Association reports that mortgage applications rose 16.4% during the past week, boosted primary by an 18% upward spike in refinancings. But home values continue to be sluggish, indicating that buyers can get some good deals, but sellers are having to bite the bullet.
As mentioned above, the U.S. dollar accounts for a good chunk of the slide in mortgage rates this week. Like Tom Brady under siege by the Denver Bronco defense yesterday, the greenback is getting pummeled by the euro and by Asian currencies. As mortgage bonds are tied to the dollar, any slide in the dollar usually means a slide in mortgage rates, and that’s what we're seeing these days.