Deepening problems in the Middle East, like the financial problems in Europe earlier this year, led investors to purchase more bonds which in turn helped mortgage rates decline. Weaker-than-expected economic news such as a decline in durable goods orders and signs that the housing recovery could be slowing also helped drive mortgage rates lower.
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan declined by 7 basis points (0.07 percent) to 4.68 percent, which, while not near historic lows, at least dropped below last week's two-year high. Average rates for 15-year fixed-rate mortgage loans declined by 4 basis points (0.4 percent) to 3.76 percent. FHA-insured, 30-year fixed-rate home loan rates dropped by 10 basis points (0.10 percent) to an average rate of 4.26 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM), dropped slightly by 1 basis point (0.01 percent) to an average rate of 3.41 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
Durable goods orders dropped by 7.3 percent in July, while core capital goods, a category that covers business-related spending, dropped by 3.3 percent in July.
On the good-news side, Gross Domestic Product for the second quarter of 2013 was revised up to 2.5 percent, a large revision up from 1.7 percent and an indication that the economy may be gaining strength. Pending home sales declined by 1.6 percent in July, which, in combination with the previous week's report of a drop in new home sales, could indicate that the housing market is being impacted by rising mortgage rates.
The mortgage experts at HSH.com anticipate that mortgage rates will rise a little this week depending on new economic data and the situation in Syria.
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