Destructive East Coast weather, economy keeps rates in record-low territory

ratestorm

Tropical storm weather, low inflation and economic growth helped keep mortgage interest rates near record lows the week ending Nov. 1, 2012.

The average rate on the 30-year fixed-rate mortgage (FRM) was 3.39 percent, with an average 0.7 point, down from 3.41 percent last week.

The rate was an even 4 percent a year ago, according to Freddie Mac’s Primary Mortgage Market Survey.

Financial markets re-opened Wednesday after Hurricane Sandy forced nearly two days of inactivity on Wall Street. Returning investors sought safe have in bonds, which helped move mortgage-backed security prices higher and mortgage interest rates lower.

Damage from Hurricane-Tropical Storm Sandy has been estimated to come in as high as $80 billion, as the storm takes a toll on both the recovering housing market and the economy at large.



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“The economy grew 2.0 percent in the third quarter with residential fixed investment contributing 0.3 percentage points to growth. The core price index of personal consumer expenditures grew 1.7 percent between September 2011 and 2012 and was within the Federal Reserve’s preferred target range,” said Frank Nothaft, vice president and chief economist at Freddie Mac.

The average rate on the 15-year FRM was 2.70 percent, with an average 0.7 point, down from 2.72 percent last week. A year ago, the 15-year FRM averaged 3.31 percent.

The average interest rate on 5-year Treasury-indexed, hybrid adjustable rate mortgage (ARM) was 2.74 percent this week, with an average 0.6 point. It was down from last week’s average 2.75 percent and 2.96 percent a year ago.

Finally, for the week ending Nov. 1, Freddie Mac reported the 1-year Treasury-indexed ARM averaged 2.58 percent, with an average 0.4 point, down a tad from 2.59 percent last week, and 2.88 percent a year ago.

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