Residential financing rates reach recent low in 2014
Posted on Monday, May 12, 2014 at 6:35:34 AM
So far in 2014, borrowers interested in affordable residential financing have watched as rates fluctuated up and down month after month. However, recent data released by government-sponsored enterprise Freddie Mac indicated that a new low has been reached for this year.
For the week ending May 8, the 30-year fixed-rate mortgage averaged only 4.21 percent, down from 4.29 percent the week prior, Freddie Mac reported. This is the lowest it has been since early November 2013. The 15-year FRM also declined, now at 3.32 percent, compared to 3.38 percent from the week before.
Frank Nothaft, vice president and chief economist for Freddie Mac, said in a statement that the changes are likely related to a decline in Treasury yields, an improved job situation and a shrinking unemployment rate.
On a similar note, the Mortgage Bankers Association found that residential financing credit availability dropped in April, based on the Mortgage Credit Availability Index report.
"There continues to be countervailing trends in the data," said Mike Fratantoni, chief economist for the MBA. "On one hand, credit continues to be more available to jumbo borrowers, particularly those seeking adjustable rate mortgages, and we are beginning to see some loosening within conventional and FHA programs for conforming loans. On the other hand, some investors shut down or tightened criteria for certain programs."
This trend indicates that lending standards are tightening, the MBA noted.