Mortgage Rates Tick Down On Weak Data

Mortgage rates continued to edge lower this week, according to figures released today by Freddie Mac. The agency said average 30-year fixed mortgage rates fell to 4.32 percent, from 4.39 percent a week ago. Meanwhile, 15-year fixed rates eased to 3.40 percent from 3.45 percent last week.

Falling mortgage rates can be traced mainly to a recent spate of poor economic data, which has pushed bond yields sharply lower. It seems the U.S. economy hit a wall sometime in the last month: auto inventories are piling up, new and pending home sales numbers fell far short of expectations, durable goods orders declined, and the stock market has turned south. Even home prices look to be softening, after a fantastic 2013.

“Mortgage rates eased somewhat as new home sales fell 7 percent in December, below the consensus. The S&P Case-Shiller house price index declined 0.1 percent for the month of November, the first decrease since November 2012,” said Frank Nothaft, vice president and chief economist of Freddie Mac.

Despite startlingly lackluster economic data, the U.S. Federal Reserve announced on Wednesday that it will continue to reduce its asset purchase program, which could slow growth even further. In a statement following the two-day meeting in Washington, Fed officials said they would trim $10 billion from their monthly bond purchases even though “labor market indicators were mixed” and the housing recovery “slowed somewhat.”