Mortgage rates fell to one of the most extreme lows this year during the week ending November 21. According to a national weekly survey by Freddie Mac, results concluded that declines in manufacturing growth (industrial products) lowered the rates by 0.1% last month.
Freddie Mac chief economist Frank Nothaft spoke about the lowered rates after the results of said survey were released this week, indicating that the average rate for a 30-year fixed-rate loan was lowered to 4.22% this week. Last week, that same popular mortgage product was rated at 4.58%.
Freddie Mac’s survey showed that the average rates on a 15-year fixed-rate loan were reaching 3.35% last week; this week, the 15-year term rates fell to 3.27%.
Findings showed a downturn in the inflation rate, as well. Nothaft said that the ‘consumer price index saw its smallest increase since October of 2009.’ The year 2013 had seen mostly a rise in the rates, beginning in January with the 30-year fixed-rate loan being 3.34%. By August, that number had reached a high of 4.58%, according to CNN.
Bankrate.com, however, had slightly varied results from Freddie Mac’s. Their findings showed that this week, the 30-year fixed-rate loan fell to 4.39%, whereas the previous week it was at 4.48%. Their 15-year fixed-term rates were also reduced, from last week’s 3.49% to 3.27% this week. They went on to show that adjustable mortgage rates – 5-year and 7-year terms – were also in decline this week.
On May 1, the 30-year term fixed-rate was 3.52%, which would cost a borrower $900 a month for a $200,000 mortgage. With the current rate, that same loan would require a monthly payment of $1,000.
The mortgage rates are not expected to change significantly anytime soon; the decline is presumed to have been caused by Janet Yellen’s comments last week at a Senate Banking Committee hearing. Yellen is the imminent replacement for current Fed chairman Ben Bernanke, whose term ends in January. According the International Business Times, Yellen has been clear in her support of the policies Bernanke has implemented during his time in office. She has indicated the she believes the ‘benefits of the bond-buying program continue to outweigh the costs, and the best way for the Fed to help overcome income inequality is through recovery of the job market.’
No word yet on strategies for implementing that.
Main image courtesy @federalreserve via Twitter.