(Business Journal) – Mortgage rates remain low as the Federal Reserve continues to make moves to keep them that way.
Freddie Mac’s weekly rate report says 30-year fixed-rate mortgages fell to an average 4.82 percent, down from 4.86 percent last week. A year ago, 30-year mortgages were averaging about 6 percent.
Long-term fixed rate mortgages are now on par with many adjustable rate mortgages. A one year ARM also averaged 4.82 percent this week.
“Long-term fixed-rate mortgage rates have remained below 5 percent for the past 10 weeks as the U.S. Treasury and Federal Reserve act to keep interest rates low through security purchases,” says Freddie Mac (NYSE: FRE) chief economist Frank Nothaft. “The treasury purchased $136 billion in mortgage-backed securities through April and the Fed bought $740 billion through mid-May.”
The Federal Reserve has also purchased $115 billion in Treasury bonds since March.
Homebuilder confidence rose this month, according to the National Home Builders Association, despite a drop in housing starts. The decline in construction was led primarily by a continued drop in condo and apartment construction.
The Mortgage Bankers Association also reported this week a continued rise in mortgage applications, led by refinancing activity.
Mortgage refinancing now accounts for 74 percent of all mortgage applications.