A week of troubling economic data helped push fixed mortgage interest rates to a new low for the year, representing the seventh consecutive weekly decline, according to the latest survey from Freddie Mac.

Surveys of national consumer confidence and manufacturing activity in the past month have suggested the economy may be slowing, said Freddie Mac Chief Economist Frank Nothaft. The S&P Case-Shiller National Home Price Index, meanwhile, showed first-quarter home prices fell by the steepest annual rate since the third quarter of 2009.

“Fixed mortgage rates followed U.S. Treasury yields lower this week amid financial market concerns that the current lull in the economy is continuing,” Mr. Nothaft said.

The 30-year fixed-rate mortgage averaged 4.55% in the week ended Thursday, down from 4.60% the prior week and 4.79% a year earlier. Rates on 15-year fixed-rate mortgages fell to 3.74% from 3.78% the previous week and 4.20% a year earlier.

Five-year Treasury-indexed hybrid adjustable-rate mortgages held steady from last week at 3.41%, but are down from 3.94% a year earlier. One-year Treasury-indexed ARM rates rose to 3.13% from 3.11% the prior week but are down from 3.95% a year earlier.

To obtain the rates, 15-year mortgages required an average payment of 0.7 point, while the others required a 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

The average rates on the 30-year fixed mortgage dropped this week to 4.77 percent from 4.86 percent the previous week, after hitting a 40-year low of 4.17 percent in November, Freddie Mac said today.

The rate of the 15-year mortgage loan dipped to 4.13 percent from 4.2 percent last week, with a 40-year low of 3.57 percent recorded in November. Rates have been steadily rising since November, as investors have shifted money into stocks, the Associated Press reported.

Many predict that the tax-cut plan will spur economic growth and increase inflation. However, low mortgage rates did little to boost home sales last year and higher rates now could hamper a strong recovery. According to Capital Economics, the number of borrowers who applied for a mortgage in December was 10 percent below the same month in 2009.

The number of purchase applications has been rising along with sales, but last year’s sales pace was shaping up to be the slowest in 13 years.

Source: http://therealdeal.com/newyork/articles/30-year-fixed-mortgage-rate-drops-to-4-77-percent-says-freddie-mac