Mortgage rates drop as economy worsens

Freddie Mac released the results of its most recent Primary Mortgage Market Survey, which found mortgage rates fell due to poor economic data and dropping bond yields. According to the research, the average 30-year fixed mortgage fell to its lowest rate in 2011 and the average 15-year fixed mortgage set a new record low.

The data showed the interest on an average 30-year fixed-rate mortgage fell from 4.55 percent last week to 4.39 percent, and the average 15-year fixed-rate mortgage interest dropped from 3.66 percent a week ago to 3.54 percent. Frank Nothaft, vice president and chief economist for Freddie Mac, cited the economic climate's affect on the housing market. Factors such as falling treasury bond yields, a weaker economic growth than anticipated for the second quarter and a decline in consumer spending has forced mortgage rates to historic lows.

"The first half of this year was the worst six-month period since the economic recovery began in June 2011," Nothaft said.

Fox Business recently reported mortgages rates fell despite mortgage experts' anticipation of an increase with the debt ceiling issue being resolved. Poor economic data and a persistent debt crisis in Europe has kept mortgage rates on a steady decline, reported the news source.

Michael Becker, mortgage banker at WCS Funding Group, told the news source, "Everybody was focusing so much on the debt ceiling last week that economic reports were sort of brushed aside, but they have really impacted the market." 

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