Mortgage rates remained little changed as U.S. economic growth continued to gel and inflation remained under control.
The average rate on the 30-year fixed-rate mortgage (FRM) was 3.34 percent, with an average 0.7 point, the week ending Dec. 6, up from 3.32 percent last week, according to Freddie Mac’s weekly Primary Mortgage Market Survey. A year ago, the 30-year FRM averaged 3.99 percent.
“Mortgage rates were little changed and near record lows this week amid indicators of stronger economic growth and signs of tame inflation. Third quarter real GDP growth was revised from an initial report of 2.0 percent to 2.7 percent, nearly matching the market consensus forecast. Meanwhile, the 12-month growth rate of the core price index of consumer expenditures remained at 1.7 percent in October which is on the low end of the Federal Reserve’s projection range for this year,” said Frank Nothaft, vice president and chief economist, Freddie Mac.
The average interest rate on 5-year Treasury-indexed, hybrid adjustable rate mortgage (ARM) was 2.69 percent this week, with an average 0.6 point. It was down from last week’s 2.72 percent and down from 2.90 percent a year ago.
Finally, for the week ending Dec. 6, Freddie Mac reported the 1-year Treasury-indexed ARM averaged 2.55 percent, with an average 0.5 point, down from 2.56 percent last week, and down from 2.80 percent a year ago.
Nothaft said, “The housing market is aiding in this recovery. For instance, fixed residential investment added growth over the past six consecutive quarters and in the third quarter alone contributed 0.3 percentage points to real GDP growth. In addition, residential construction spending was up 3 percent between September and October. And, pending home sales saw a 5.2 percent increase in October to its highest reading since March 2007.”