According to Freddie Mac’s weekly survey for the week ending Thursday, February 6, 30-year fixed-rate mortgage rates declined from 4.32 percent to 4.23 percent, a tumble of nine basis points. Average rates for 15-year fixed-rate mortgage products dropped seven basis points from 3.40 percent to 3.33 percent.
Although, mortgage rates have been declining for several weeks on end, they remain close to a full percentage point higher than they were in early May 2013. Due to speculation of the Federal Reserve tapering its major economic stimulus of $85 billion worth of bond purchases per month, rates had started climbing in May, with the most noticeable spikes taking place in the summer. The Fed has since tapered its bond purchases by $10 billion per month due to the upbeat tone of recent economic reports. The so-called “QE3” stimulus is now being made to the tune of $65 billion per month.
Separately, CoreLogic’s newest data, released earlier this week, indicated that U.S. home prices slipped month-to-month in December, while activity in the December ending quarter resulted in a slower year-over-year increase. December’s decline in home prices was the third consecutive monthly drop following upticks recorded for eight straight months through September 2013. For the whole of 2013, home prices were up by a generous 11 percent.
And in yet another salient report released this week, the Commerce Department said that U.S. construction expenditures were up slightly in December, another slowdown in growth that may be a harbinger of slower growth in the broader mortgage market in 2014.