It isn't out of the ordinary for mortgage rates to drop or even hold steady when real estate activity is slow, such as characteristic of the winter season and around holidays. After a mix of reports throughout January and February, the most recent Primary Mortgage Market Survey from Freddie Mac revealed that average rates for all mortgage types fell the final week of February.
According to the report, the average rate for 30-year fixed-rate mortgages fell from the previous week after posting gains while other sectors of the survey were unchanged for the last three weeks. The average dropped to 3.51 percent from 3.56 percent the week before, but remained notably lower than the 3.9 percent average recorded this time a year ago.
Additionally, the average rate for 15-year FRMs decreased from 2.77 percent recorded last week to 2.76 percent. Affordability is still available for those looking to purchase a home with a 15-year FRM, as this time last year the average was 3.17 percent.
Data from Freddie Mac revealed the average rate for 5-year adjustable-rate mortgages was also down on a week-over-week basis, reaching 2.61 percent from 2.64 percent from a week ago. The average has been growing closer to that of last year, when the rate was 2.83 percent. The average rate for 1-year ARMs also fell to 2.64 percent from 2.65 percent the week before.
Even though averages for ARMs have been steady in recent weeks, the Mortgage Bankers Association's Weekly Application Survey for the week ending February 22 revealed ARMs only accounted for 4 percent, matching the level from a week ago.
"Mortgage rates eased somewhat as the consumer price index in February held steady for the second month in a row," said Frank Nothaft, vice president and chief economist of Freddie Mac. "House price indicators, however, showed gains in 2012. The S&P/Case-Shiller national home price index rose 7.3 percent last year, reflecting the largest four-quarter growth since the third quarter of 2006. This, in part, was a driving force that pushed up the number of existing and new home sales in February to the highest levels since July 2007 and July 2008, respectively."