Mortgage rates across the United States dipped to a new low for the week ended Thursday to reach its lowest since July 2013, according to the weekly results of Freddie Mac's Primary Mortgage Market Survey.
The average 30-year-fixed mortgage rates slumped to 3.92 percent from last week's 3.97 percent. The rate was 4.13 percent at the same time, last year.
The average 15-year-fixed mortgage rates went down to 3.08 percent from last week's 3.18 percent. It averaged 3.24 percent at the same time, last year.
The five-year treasury-indexed hybrid adjustable mortgage rate declined to 2.91 percent from last week's 2.92 percent. The rate was 3.00 percent a year ago.
The average one-year treasury-indexed adjustable mortgage rate was the only rate that inched up slightly to 2.41 percent this week from last week's 2.38 percent. The rates averaged 2.60 percent at the same time last year.
Experts attributed the fall in rates this week to a further tumble in the treasury bond's yield and the existing home sales report.
"Fixed mortgage rates continued to fall this week after the yield on 10 year Treasuries dropped to their lowest point of the year. Existing home sales beat expectations in September clocking in at an annual rate of 5.17 million units, up 2.4 percent from August. Housing starts were up 6.3 percent in September adding a seasonally adjusted annual rate of 1.017 million units. Building permits rose 1.5 percent to a seasonally adjusted annual rate of 1.018 million units in September," Frank Nothaft, chief economist and vice president at Freddie Mac, said in a statement.
Mortgage applications also spiked 12 percent for the week ending Oct 17, 2014, according to the Mortgage Banking Association. Refinancing applications took up the large chunk increasing 23.3 percent from a week ago while new purchase application fell 4.8 percent this week.
The low mortgage rates have driven up demand for refinancing loans in the past few months.
"The dip in rates here are for people who were looking at the numbers throughout the summer and saying, 'It's pretty close.' And now you have a place where that refinance might make sense,"Keith Gumbinger, vice president of HSH.com, a mortgage-data company, told Bloomberg in a telephone interview.
Some analysts say that mortgage rates could only go this low for 2014 and will stabilize in the following few weeks.
"After a sharp dip in the rates last week, the market has corrected itself. I think it has reached a point where it should trade in a tight zone for a week with little volatility. That should keep the mortgage rates stable this week," Shashank Shekhar, CEO of Arcus Lending Inc., told Realtor.com.
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