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Freddie Mac: Residential financing rates reach yearly lows

Posted on Thursday, October 16, 2014 at 10:15:39 AM

There is more good news for homebuyers in today's housing market: Freddie Mac recently announced that residential financing rates have dropped to their yearly lows for 2014.

According to the government-sponsored enterprise, the 30-year fixed-rate mortgage averaged only 3.97 percent for the week ending Oct. 16. Last week, that average was 4.12 percent and 4.28 percent at the same time last year. A similar decrease was noted for the 15-year FRM, which dropped from 3.30 percent down to 3.18 percent on a weekly basis.

Both adjustable-rate variants also experienced declines for the seven-day period ending Oct. 16.

"Mortgage rates were down sharply following the decline in the 10-year Treasury yield for the second straight week," explained Frank Nothaft, chief economist and vice president at Freddie Mac. "Rates are at their lowest levels since June 2013 amidst continued investor skepticism regarding the precarious economic situation in Europe."

In addition to these declines, the Mortgage Bankers Association reported a steady increase in residential financing applications for the week ending Oct. 10. The organization's Market Composite Index showed that mortgage applications ticked up 5.6 percent on a weekly basis. The Refinance Index increased 11 percent during that time.