Low inflation keeping interest rates low

Mortgage interest rates fell across the board this past week and remained below year-ago levels, according to data from U.S.-backed mortgage giant Freddie Mac for the seven days that ended today. The 30-year fixed-rate mortgage averaged 4.80 percent with 0.7 points during the week, down from 4.91 percent in the week prior and 5.07 percent in the same week last year. Meanwhile, the 15-year fixed-rate mortgage saw its interest rate fall to 4.13 percent with 0.7 points, down from 4.13 percent a week ago and 4.39 percent in 2010. Treasury-indexed hybrid adjustable-rate mortgages were also down week-over-week, with the 5-year version averaging 3.61 percent and the 1-year version averaging 3.16 percent, down from 3.78 percent and 3.25 percent, respectively, during the week prior. Frank Nothaft, vice president and chief economist at Freddie Mac, attributed the declines to minimal inflation. “Low inflation is keeping mortgage rates at bay,” Nothaft said. “The core consumer price index rose just 0.1 percent in March, below the market consensus forecast. The 12-month growth rate in core prices was 1.2 percent, which is also rather low by historical standards.” TRD