Mortgage rates have held steady for the third consecutive week, remaining largely unchanged amid a flurry of positive economic news.

Average interest rates on the standard 30-year fixed-rate mortgage were at 4.00 percent last week, according to the weekly Freddie Mac rate survey, up from 3.99 percent previously. Average rates on 15-year fixed rate home loans were also up by a single point, to 3.31 percent this week.   Meanwhile, initial interest rates on 5-year Treasury indexed adjustable-rate mortgages (ARMs) edged slightly down, to 2.97 percent, down from 2.98 percent previously. The three rates are virtually unchanged from where they were at the beginning of the month, and remain within a few basis points of their all-time lows. 

Little impact from economy seen

  “Mortgage rates were little changed this week just as the economy is showing potential for further gains in the near term,” said Frank Nothaft, Freddie Mac chief economist. “Retail sales rose for the fifth straight month in October and beat the market consensus forecast. Meanwhile, consumer confidence rose for the third consecutive month in early November to the highest reading since June, according to the University of Michigan’s sentiment index.”   Homebuilder confidence also increased for the second consecutive month, the National Association of Home Builders reported earlier this week.   In contrast to all those encouraging reports, fears of a recession in Europe triggered by the debt crisis dampened the overall economic outlook. The weakened economy has played a significant role in keeping mortgage rates as low as they are, in addition to massive intervention by the U.S. Federal Reserve. 

Mortgage rates staying near record lows

  The lowest mortgage rates Freddie Mac ever reported came the week of Oct. 6 this year, when 30-year fixed-rate mortgages dropped to an average of 2.96 percent. That was the lowest 30-year rate reported by a government-affiliated source since the late 1940s. Fifteen-year fixed-rate loans and 5-year ARMs hit record lows that week as well.   The unusually low rates still are not generating much interest among consumers, however. Mortgage refinance applications fell by 12.2 percent last week, after rising slightly less than that the week before, according to the Mortgage Bankers Association. Applications for mortgages to buy a home fell a seasonally adjusted 2.3 percent last week and were running 9.5 percent below their level of one year ago.   

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