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Freddie Mac: Residential financing rates drop again

Posted on Friday, October 4, 2013 at 12:45:36 PM

For the third week in a row residential financing rates dipped slightly lower, according to Freddie Mac. This recent change occurred right before the government shutdown, which has some analysts concerned that the next reading might have a new direction.

The average fixed mortgage rate declined once more, with the 30-year fixed-rate mortgage at the lowest level it has been since the end of June, Freddie Mac reported in its Primary Mortgage Market Survey.

"With the onset of the federal government shutdown and declining consumer confidence, fixed mortgage rates fell for the third consecutive week," said Frank Nothaft, vice president and chief economist for Freddie Mac. "Consumer sentiment fell for the second month in a row in September to its lowest reading since April, according to the University of Michigan."

Other residential financing rates besides the 30-year FRM dropped as well. The 15-year FRM averaged 3.29 percent, down from last week's 3.37 percent.

In addition, the government shutdown could push rates back up if it lasts for an extended period of time, according to USA Today. Greg McBride, of Bankrate.com, told the news source that the standstill in Washington, D.C., is a headwind for the economy, but it won't change the game.