The 30-year mortgage rate averaged 3.88% for the week ending April 12, 2012, down from 3.98% last week, and the 15-year rate averaged a new all-time record low of 3.11%, according to data from Freddie Mac released on Thursday.
The drop, which was the third consecutive weekly decline, comes as long-term Treasury bond yields fell after a weaker than expected employment report for March, according to Frank Nothaft, vice president and chief economist, Freddie Mac.
The weekly data have become a checking in point for those looking to call a bottom in the great housing debate. The Daily Ticker sums it up:
"Housing bulls point to a stabilization of prices in many metro areas,
overall sales at a 5-year high, a decline in the inventory of homes for
sale, fewer foreclosures and record levels of affordability ...
Bears note that national home
prices are still falling, albeit at a slower pace, while buying a home
is unthinkable for millions of Americans suffering from bad credit,
tougher lending standards and high unemployment. In addition, many
experts predict a massive "shadow inventory" of homes will come on the
market at the first sign of a sustained bottom and believe foreclosures
will spike again now that the $26 billion settlement with big banks has
Prior to the slightly more pronounced drop this week, the rate has lingered close to the 4% mark, topping it only one week so far this year.
Last year at this time, the 30-year rate averaged 4.91%.
With the minute changes week-to-week in the 30 year mortgage rate, it's
easy to get the idea that any movement higher is a hint of a change to come. But it would take a lot more to turn the corner, or even create a blip in the bigger picture (see ten year chart below).
Thus far, any urgency potential buyers have felt this year has amounted to nothing more than a series of head fakes. The most recent S&P/Case Shiller Home Price index data, which goes through January, showed annual declines of 3.9% and 3.8% for the 10- and 20-City Composites, respectively. That's only through January, of course, but the four week moving average for the mortgage application index, an indication of how many people are entering the home buying process, is down 2.08%, as of last week. Much of that, however, is due to the lack of refinancing demand -- the refinancing component of the index decreased for the eighth consecutive week last week to its lowest level since July, 2011.
Are you seeing changes in housing locally? Add your two cents in the comment section below.