30-Year Rates Fall Back Below 5 Percent

By:: Kirk Haverkamp | May 14, 2010

Mortgage rates dropped to their lowest levels of 2010 this week, with 5-year adjustable rate mortgages hitting an all-time low, according to the Freddie Mac weekly rate survey.

Average interest rates on the standard 30-year fixed-rate mortgage fell to 4.93 percent, down from 5.00 percent last week and the first time in six weeks the rate has been below 5 percent. Meanwhile, the 5-year Treasury indexed mortgage dropped to an average initial rate of 3.95 percent, down from 3.97 percent last week. It’s the lowest the 5-year ARM has been since Freddie Mac began tracking it in January 2005.

Average interest rates on the 15-year fixed-rate loan also declined, to 4.30 percent, from 4.36 percent last week. The 30-year rate included an average 0.7 points paid; the other two rates assumed 0.6 points.

Homeowners have been moving to take advantages of lower rates with a renewed interest in refinancing. Applications to refinance existing mortgages rose 14.8 percent last week, according to figures from the Mortgage Bankers Association, even as purchase applications declined 9.5 percent following the end of the federal homebuyer tax credit program.

The reporting periods for the two surveys differ; the Freddie Mac survey covers the week ending Thursday, May 13; the MBA survey covers the week ending Friday, May 7 and was released on Wednesday.

Interest rates on fixed-rate mortgages have now been declining for the past five weeks since briefly surging in early April. Rates were widely expected to begin rising once the Federal Reserve ended a program of purchasing mortgage securities at the end of March, but a sustained increase has yet to materialize.

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National Rates

Loan Type	Today	+/-
30 yr fixed	3.78
15 yr fixed	3.06
5/1 ARM	2.69

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