Mortgage rates continued to make like a bouncing ball during the week ending November 6.
According to the Primary Mortgage Market Survey conducted by Freddie Mac, mortgage interest rates dropped sharply this week following three weeks where long term rate rose and fell and rose again over a range of more than 50 basis points.
This past week the 30-year fixed-rate mortgage (FRM) dropped from 6.46 percent with 0.7 point to 6.20 percent and 0.7 point. In the last four weeks the 30-year had twice spiked in very large moves to 6.46 percent.
The 15-year FRM this week averaged 5.88 percent with 0.7 point compared to 6.19 percent with 0.7 point during the week ended October 30.
The five-year Treasury-indexed hybrid adjustable-rate mortgage carried an average contract interest rate of 6.19 percent with 0.6 point. During the previous week the average was 6.36 percent with 0.7 point.
The one-year Treasury-indexed ARM fell 13 basis points to an average of 5.25 percent. Fees and points which averaged 0.6 point a week earlier fell to 0.4 point.
According to a statement released by Frank Nothaft
, Freddie Mac vice president and chief economist said, "Mortgage rates fell this week amid new indications of a pullback in consumer spending and a weaker jobs market. The economy shrank by 0.3 percent in the third quarter, led by the first decline in consumer spending since the fourth quarter of 1991. In September alone, consumer spending fell by the most since June 2004. More recently, job layoffs more than doubled in October compared to September on year-over-year basis.
"With the economy contracting and experiencing record home foreclosures, lenders tightened their credit standards further, according to the October Federal Reserve Senior Loan Officer survey. Approximately 70 percent of banks raised their lending standards for prime mortgages and about 90 percent of banks that offer nontraditional mortgages did so as well."