Rates on 30-year mortgages fell for a fifth consecutive week last week even as the Federal Reserve was boosting short-term rates.
Mortgage giant Freddie Mac reported in its weekly survey that rates on 30-year, fixed-rate mortgages averaged 5.75 percent last week, down from 5.78 percent the previous week.
The decline pushed the 30-year rate down by more than a quarter-point from the 6.04 percent high for this year reached at the end of March.
Analysts attributed this week’s drop to further evidence that the economy slowed significantly in March, a slowdown that is expected to keep the Federal Reserve from abandoning its gradual approach to raising interest rates. The Fed on Tuesday boosted a key short-term rate for the eighth time since last June, raising its target for the federal funds rate by a quarter-point to 3 percent.
“With some economic indicators showing signs that the economy is experiencing a soft spot at the moment, low mortgage rates will ensure that housing activity will continue to flourish throughout the spring buying season,” said Frank Nothaft, Freddie Mac’s chief economist.
The housing market has continued at a strong pace this year, reflecting the still historically low mortgage rates. The government reported last week that sales of new homes shot up to an all-time high of 1.43 million units in March.
Analysts believe mortgage rates will resume rising in the months ahead but at a gradual pace that would leave the 30-year mortgage around 6.5 percent by the end of the year.
Rates on 15-year, fixed-rate mortgages, a popular option for refinancing, declined along with the 30-year rate, falling to 5.31 percent, down from 5.33 percent last week.
However, rates on one-year adjustable-rate mortgages edged up to 4.22 percent from 4.21 percent last week.
Five-year hybrid adjustable rate mortgages were up as well, averaging 5.31 percent this week, compared to 5.20 percent last week. These hybrid mortgages have a fixed rate for five years and adjust each year after that.
A year ago, 30-year mortgages averaged 6.12 percent, 15-year mortgages were at 5.47 percent and one-year ARMs averaged 3.76 percent.
People
Lea Whyte has joined the Everett South office of Home Realty.
Seminars
A home ownership fair will be held from 10 a.m. to 5 p.m. May 14 at Everett Station, 3201 Smith Ave. Numerous seminars and exhibits are aimed at helping people who want to buy a house. Interpreters in Spanish, Russian, Korean and Vietnamese will be available. Call 425-337-1394 for more information.
A series of free seminars on the rights of renters and landlords will be held this month by the Dispute Resolution Center of Snohomish County. All run 6:30-8:30 p.m. The first is May 16 at the Marysville Public Library, 6120 Grove St. Another will be held May 24th at the Everett Public Library, 2702 Hoyt Ave. The final session will be May 25 at Lynnwood Library, 19200 44th Ave. W. Call 425-339-1335 for more information.
Send items to Mike Benbow, Business editor, The Herald, P.O. Box 930, Everett, WA 98206, by fax at 425-339-3435 or by e-mail at economy@heraldnet.com
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