U.S. mortgage rates fell below 4 percent following disappointing housing data released in the past week, Freddie Mac said Thursday.
The 30-year fixed-rate mortgage rate fell to 3.99 percent in the week ending March 29 from 4.08 percent in the previous week. Last year, the 30-year rate averaged 4.86 percent.
Mortgage rates slid this week amid weaker housing economic indicators, said Frank Nothaft, chief economist of Freddie Mac.
The S&P/Case Shiller Home Price Indices fell to new lows in January, while new and pending home sales fell in February, missing forecasts.
The 15-year fixed-rate mortgage was 3.23 percent, down from 3.30 percent in the prior week and below 4.09 percent in the previous year.
Five-year Treasury-indexed hybrid adjustable rate mortgages averaged2.90 percent, down from 2.96 percent in the previous week and 3.70 percent in the prior year.
One-year ARMs averaged 2.78 percent, down from 2.84 percent in the previous week and 3.26 percent in the past year.
Separately, Bankrate.com reported in its weekly national survey of large lenders that the 30-year fixed-rate mortgage rate also fell to 4.23 percent from 4.29 percent in the previous week, and below 5.01 percent from the prior year.
Despite the recent declines, Freddie Mac said Wednesday it expects the 30-year fixed-rate mortgage to gradually increase to around 4.5 percent this year, as stronger economic growth reduces unemployment and improves the housing market.
The housing market continues to struggle amid strong economic headwinds, said Nothaft.
However, a variety of encouraging indicators suggest that the housing market may be feeling a nascent recovery, and more neighborhoods may see a stabilization in overall demand and housing values this spring.