Long-term mortgage rates again set new record lows this week as the Federal Reserve made the obvious official by declaring that the U.S. economic recovery has slowed.
Sluggish home sales since the April 30 expiration of federal tax credits has helped rates plummet since the end of April.
The 30-year fixed rate slipped to 4.44 percent from 4.49 percent last week. Last year at this time, it averaged 5.29 percent.
The 15-year fixed rate decreased to 3.92 percent from last week’s 3.95 percent. A year ago it was at 4.68.
Those figures provided by Freddie Mac are new lows based on records dating back to 1971 for the 30-year mortgage and 1991 for the 15-year mortgage.
Also setting a new low is the 5-year Treasury-indexed hybrid ARM (adjustable rate mortgage). It averaged 3.56 percent this week, compared to last week’s 3.63 percent.
The Fed’s announcement Tuesday after its policy-making Federal Open Market Committee meeting including sobering news: Household spending remains constrained; housing starts are still depressed and bank lending has continued to contract.
A slowed recovery virtually guarantees that the historically low federal funds rate of 0-.25 percent will be intact well into next year.
The Fed also announced it would help support economic recovery by keeping constant its holdings of securities by re-investing principal payments from acquired debt and mortgage-backed securities into longer-term Treasury securities.
