Slower economy keeps reins on mortgage rates
30-year fixed rate averages 6%
Thursday, July 15, 2004
Inman News
 Frank Nothaft,
Freddie Mac |
Mortgage rates showed little movement this week, held back by
weaker-than-expected retail sales and moderate inflation, according to
surveys conducted by mortgage buyer Freddie Mac and Bankrate.
In Freddie Mac's weekly survey, the 30-year fixed-rate mortgage
averaged 6 percent for the week ended today, down from last week when it
averaged 6.01 percent.
The average for the 15-year fixed-rate mortgage this week is 5.4
percent, also down from last week when it averaged 5.42 percent. Points on
both the 30- and 15-year averaged 0.6.
One-year Treasury-indexed adjustable-rate mortgages averaged 4.02
percent this week, with an average 0.6 point, down from last week when it
averaged 4.05 percent.
"Taken as a whole, there are few compelling reasons why mortgage rates
should dramatically increase right now," said Frank Nothaft, Freddie Mac
vice president and chief economist. "In terms of the economy, retail
sales, industrial production, and producer prices were all lower than
expected in June. Additionally, the Federal Reserve Board appears to be on
target in quelling any future surges in inflation.
"With inflation under control, and the economy growing nicely, the
housing market continues at its current healthy pace." 
Fixed mortgage rates inched higher amid evidence of moderate economic
growth. The average 30-year fixed-rate mortgage increased from 6.08
percent to 6.11 percent, according to Bankrate.com's weekly national
survey of large lenders. The 30-year fixed-rate mortgages in this week's
survey had an average of 0.29 discount and origination points.
The 15-year fixed-rate mortgage popular for refinancing nosed higher
from 5.48 percent to 5.5 percent. The average rates for the jumbo 30-year
fixed-rate mortgage and one-year adjustable-rate mortgage both increased 2
basis points to 6.3 percent and 4.35 percent, respectively. A basis point
is one one-hundredth of one percentage point.
The best web templates providers online who offer high quality web Templates HTML web templates for both novice and experienced users. Build your own website with a professional web template. Mortgage rates increased only slightly as sluggish retail sales for
June hinted at an economy expanding more modestly than originally
expected. Moderate economic expansion would keep the Federal Reserve from
raising short-term interest rates too aggressively in the months to come.
Long-term interest rates, to which mortgage rates are closely related,
moved only slightly higher on such expectations. Inflation reports slated
for release today and Friday also loom large and could impact the
direction of mortgage rates in the weeks to come. Higher-than-expected
inflation would lead the Fed to raise interest rates more aggressively in
the second half of 2004. | 
