Mortgage Rates Inch Back Down to 2014 Low photo

Fixed mortgage rates for most home loans fell slightly this week to once again hit their 2014 low.

The average interest rate on a 30-year fixed mortgage dipped to 4.12% from 4.14% last week, according to the latest survey from mortgage buyer Freddie Mac. It was at 4.40% a year ago.

Meanwhile, the average rate on a 15-year fixed loan dropped to 3.24% from 3.27% last week. At this time last year it averaged 3.44%.

“Mortgage rates were down slightly amid a week of light economic reports,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “Of the few releases, retail sales were virtually unchanged in July after a 0.2% increase in June, ending five months of increases. Excluding motor vehicles and parts, retail sales were up 0.1% last month.”

Averages for the two most popular hybrid adjustable-rate mortgages were mixed. The five-year ARM inched down to 2.97% from 2.98% a week ago. A year ago, it averaged 3.23%. The one-year ARM average ticked up to 2.36% from 2.35% last week. It was at 2.67% at this time last year.

Rates have fallen recently after rising at the end of 2013, when the Federal Reserve announced it would begin to curb its bond-buying stimulus program. The program has helped offset dramatic gains in real estate prices and kept affordability elevated while the market has stabilized.

Looking ahead, most analysts predict rates will hold steady in the short term.

In the latest Mortgage Rate Trend Survey by, 73% of the analysts polled said rates will remain unchanged over the next week while 20% of analysts predict rates will seesaw upward.

“Things seem to have settled down just a bit in the roller-coaster world of the bond market and mortgage interest rates,” said Derek Egeberg, branch manager at Academy Mortgage in Yuma, AZ. “Some of the global tensions seem to be easing a bit, and economic data being released domestically has been sort of a mixed bag of good news and bad news.”

“Remember: the bond market, where mortgage interest rates are priced, is the beneficiary of uncertainty or negative information or both—the sorts of things we don’t wish for! That being said, mortgage interest rates remain very attractive.”

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