Mortgage Rates Drift Lower

Mortgage rates drifted lower this week, according to figures released Friday by Freddie Mac. The government-sponsored mortgage entity said 30-year fixed mortgage rates fell to 4.39 percent, from 4.41 percent a week ago. Meanwhile, 15-year fixed mortgage rates averaged 3.45 percent, down from last week’s 3.56 percent.

Falling bond yields were largely responsible for the declines. Tepid inflation readings and the dismal December jobs report have sent yields tumbling since the start of the year.

“Mortgage rates were flat to down a little this week amid reports that inflation remains subdued,” said Frank Nothaft, chief economist for Freddie Mac.

Lower mortgage rates resulted in a surge of refinancing activity this week – refis rose to their highest level in two months, accounting for 64 percent of all mortgage activity.

Lenders are awaiting developments from the Federal Reserve meeting next week, where the bank is expected to continue reducing its asset purchase program. Further reductions could reverse the recent decline in mortgage rates, according to Freddie Mac.

The report comes amid signs the housing recovery is picking up steam again, after cooling dramatically last fall. New figures from the National Association of Realtors(NAR) showed existing home sales rising in December for the first time in three months. Home sales will likely increase further in January as buyers take advantage of lower mortgage rates.