Mortgage rates in the United States slid down slightly this week after it rose to its highest since May 2014 last week, according to Freddie Mac's Primary Mortgage Survey Index.
The average 30-year-fixed mortgage rates slid to 4.20 percent from last week's 4.23 percent. The rate was 4.32 percent at the same time, last year.
The average 15-year-fixed mortgage rates also went down to 3.36 percent from last week's 3.37 percent. It averaged 3.37 percent at the same time, last year.
The five-year treasury-indexed hybrid adjustable mortgage rate, however, went up to 3.08 percent from last week's 3.06 percent. The rate was 3.07 percent a year ago.
The average one-year treasury-indexed adjustable mortgage rate was the only rate that remained unchanged at 2.43 percent. The rates averaged 2.63 percent at the same time, last year.
Freddie Mac experts credit the slight decline in rates to the mixed economic results released this week.
"Mortgage rates were slightly changed with the rate on the 30-year fixed mortgage down three basis points," Frank Nothaft, chief economist of Freddie Mac, said in a statement.
He attributed the fall to the existing home sales report that showed figures dropping 1.8 percent in August to a seasonally-adjusted annual rate of 5.05 million.
"Sales of new single-family homes surged 18.0 percent in August to an annual pace of 504,000 units. Also, the Federal Housing Finance Agency reported house prices rose just 0.1 percent on a seasonally-adjusted basis in July, and were up 4.4 percent over the past year," he added.
Industry analysts say the positive new home sales report shows growing strength in the economy and confidence from consumers.
"...looser credit conditions and strengthening economic activity are finally giving households the confidence to purchase a new home," Paul Diggle, property economist for Capital Economics Ltd. in London, wrote to clients as per Bloomberg.
Rates went down even as the U.S. Federal reserve continued to scale back its bond-buying scheme, which had been introduced to keep long-term borrowing rates low. The Fed's purchase scheme ends next month.
Will the rates rise once the Fed stops buying bonds? According to experts - yes - but only gradually.
"Mortgage rates are going to be higher at the end of the year than they are now. But they might not start rising this week," Holden Lewis, assistant managing editor at Bankrate.com told Realtor.com.
