Mortgage Rate Dips

Up-Down-Up and Down again. The Mortgage arte is not finding a definite direction to move. The speculation is that the Federal Reserve is near the end of its rate-hike cycle. All kinds of reports are indicating that the housing market is sinking after being the major engine of U.S. economic growth for four years. The mortgage rate is reflecting that.

According to Commerce Department data released today, sales of new homes fell 3% in June, while revisions to prior months show the U.S. housing market was weaker than what was previously estimated. The seasonally adjusted annualized rate of 1.13 million new homes sold in June was below the market estimate of 1.16 million. May's sales pace was revised to a 1.17 million pace, down from 1.23 million reported last month.

According to Freddie Mac's weekly survey, the 30-year fixed-rate mortgage averaged 6.72% in the week that ended today -- down from its 6.80% average last week. At this time last year, the loan averaged 5.77%. The 15-year fixed rate averaged at 6.34% this week, again a fall from last week's 6.41%. At this time last year this rate was 5.34%.

Rate for 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARM) averaged at 6.35% decreasing from last week's 6.36%. This rate averaged 5.27% a year ago. The 1-year Treasury-indexed ARMs also moved down this week to 5.78% from last week's rate of 5.80%. At this time in 2005, the 1-year ARM averaged only 4.46%.