US mortgage rates are continuing to plunge to record lows, as signs of slow growth create doubts about the strength of the economic recovery.
According to latest figures by Freddie Mac, the average rate for 30-year fixed mortgages declined to 3.84 percent for the week ending 3 May, from 3.88 percent last week and 4.71 percent a year ago.
“Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week,” said Frank Nothaft, Chief Economist and Vice President of Freddie Mac.
Meanwhile, 15-year fixed-rate mortgages averaged 3.07 percent for the week, down from 3.12 percent last week and 3.89 percent a year ago.
Rates for the five-year Treasury-indexed hybrid adjustable rate mortgage (ARM) hit 2.8 percent while one-year Treasury-indexed ARMs dropped to 2.7 percent from 2.74 percent last week.
Nothaft said that the country’s real gross domestic product climbed to an annualised rate of 2.2 percent in the first quarter, well below the market forecast.
“The 12-month growth in the core price index of personal consumption expenditures was two percent in March which matches the Federal Reserve’s implied inflation target,” he added.
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