Sound familiar? Freddie reports record low interest rates, sluggish home sales
What if nobody came to your fire sale?
As my colleague Alejandro Lazo and I reported in an article in Thursday's Times, that is what the housing market is continuing to look like, with mortgage rates at record lows -- and new home sales also at record lows.
Confirmation that rates are scraping bottom came Thursday from a Freddie Mac survey, which reported that it had never seen 30-year fixed mortgages at lower levels in the 39 years it has tracked them.
Rates for 15-year fixed loans and 5-1 hybrids (which have a fixed rate for five years before turning adjustable for the remaining 25 years) also set record lows.
(Freddie asks lenders for a combination of rates and upfront fees, or points, that they are offering on loans of up to $417,000 to well-qualified borrowers who have 20% down payments or equity in their homes. Actual rates negotiated by solid borrowers are often slightly lower.)
From Freddie's statement:
(T)he 30-year fixed-rate mortgage (FRM) averaged 4.69% with an average 0.7 point for the week ending June 24 ... down from last week when it averaged 4.75%. Last year at this time, the 30-year FRM averaged 5.42%.
The 15-year FRM this week averaged 4.13% with an average 0.6 point, down from last week when it averaged 4.20%. A year ago at this time, the 15-year FRM averaged 4.87%.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84% this week, with an average 0.7%, down from last week when it averaged 3.89%. A year ago, the 5-year ARM averaged 4.99%.
Activity in the housing market slumped in May following the expiration of federal home-buyer tax credits.
The market consensus had been that sales of existing homes would rise by 6% in May, Freddie Mac economist Frank Nothaft said, but they instead fell by 2.2%.
And as Lazo and I reported, sales of new homes fell 32.7% to an annual pace of 300,000 units, the largest monthly drop and slowest pace since records began in 1963, according to a Census Bureau report released Wednesday.
How long will it be before unemployment declines significantly, providing a more fundamental boost to the housing market?
-- E. Scott Reckard