Mortgage rates hit a new record low again in May.
Thanks in part to last week’s disappointing employment report, fixed mortgage rates fell again this week to yet another record low.
The small amount of job growth in the private sector, reported as just 41,000 new jobs in May, highlighted the questionable strength of the recovery of the U.S. economy. Rates on fixed mortgages dropped as a result, said financial site Bankrate. According to the site’s national survey, the new rate for 30-year fixed-rate mortgages is 4.88 percent, down from 4.95 percent last week.
The reason for the drop, the site said, was that the weak job market scared investors into U.S. Treasury notes, and that the continued weak hiring in the private sector will only delay the point at which the Federal Reserve will increase short-term interest rates, which then contribute to keeping mortgage rates low.
Rates for 15-year fixed-rate mortgages fell as well, though not as substantially, the site said. The rate dropped from 4.36 percent last week to 4.33 percent. Even adjustable-rate mortgage rates declined from 4.21 percent to 4.16 percent.
Bankrate said the last time mortgage rates were above 6 percent was November of 2008.
The latest report from the Mortgage Bankers Association, which tracks mortgage application activity nationwide, noted that, in addition to the problem of falling rates, the rate of applications also declined last week. The MBA said the drop last week was a seasonally adjusted 12.2 percent. The unadjusted drop was 21.1 percent from the previous week.
