By Inman News, Thursday, November 6, 2008.
Rates on both fixed-rate and adjustable-rate mortgages retreated this week from a recent surge, but lenders continue to tighten standards as a pullback in consumer spending and weaker job market provide new indications of a slowing economy.
Rates for 30-year fixed-rate mortgages (FRM) averaged 6.2 percent with an average 0.7 point or the week ending Nov. 6, down from 6.46 percent last week and 6.24 percent a year ago, according to Freddie Mac’s latest Primary Mortgage Market Survey.
The 15-year FRM this week averaged 5.88 percent with an average 0.7 point, down from 6.19 percent last week and 5.9 percent a year ago, Freddie Mac said.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.19 percent with an average 0.6 point, down from 6.36 percent last week but up from 5.89 percent a year ago.
One-year Treasury-indexed ARMs averaged 5.25 percent with an average 0.4 point, down from 5.38 percent last week and 5.50 percent a year ago.
The economy shrank by 0.3 percent in the third quarter, led by the first decline in consumer spending since the fourth quarter of 1991, Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. Layoffs more than doubled in October compared to September on a year-over-year basis, he said.
The Federal Reserve’s latest survey of loan officers, conducted the first two weeks of October, showed 70 percent of banks raised their lending standards for prime mortgages in the previous three months, and about 90 percent of banks offering nontraditional mortgages did the same, Nothaft noted.