Mortgage Rates Still Hovering Near Record-Lows
The weekly reports on mortgage interest rates were mixed this week – but figures are still lingering close to record-lows, improving affordability for both homebuyers and borrowers looking to refinance.
Freddie Mac reported Thursday that both the 30-year fixed-rate mortgage rate and the 15-year fixed-rate were unchanged from last week, while shorter-term rates were mixed. Bankrate, on the other hand, said mortgage rates across the board dropped to new record lows it its study.
According to Freddie’s weekly survey, the average rate for a 30-year fixed mortgage held at 4.37 percent (0.7 point) for the week ending September 23, 2010. The 15-year fixed-rate mortgage remained at its record low of 3.82 percent (0.7 point).
Frank Nothaft, Freddie Mac’s VP and chief economist, explained, “Since 1975, fixed mortgage rates typically fall over the 12 months following the end of a recession. The National Bureau of Economic Research recently announced that the current recession ended in June 2009.”
“Rates for 30-year fixed mortgages were 0.7 percentage points lower in June 2010, representing the largest decline during the first year of recovery over the last six recessions. With a weaker recovery, these rates fell by another 0.4 percentage points by September,” Nothaft said.
The GSE also reported that the 5-year adjustable-rate mortgage (ARM) averaged 3.54 percent this week (0.6 point), down slightly from last week’s 3.55 percent. The 1-year ARM came in at 3.46 percent (0.7 point), up from 3.40 percent the week prior.
Bankrate’s study, which is based on data provided by the top 10 banks and thrifts in the top 10 markets, showed a drop in the average conforming 30-year fixed mortgage rate to a new record low of 4.50 percent (0.35 point). That’s down from 4.54 percent in last week’s study.
The average 15-year fixed mortgage fell below the 4 percent mark to 3.96 percent, and the larger jumbo 30-year fixed rate dipped to 5.17 percent, both record lows, according to Bankrate.
Adjustable rate mortgages hit new lows also, with the average 5-year ARM sliding to 3.71 percent and the average 7-year ARM sinking to 3.96 percent.
Bankrate attributed the drop to concerns expressed by the Federal Reserve in its monetary policy meeting earlier this week about a weakening economy and the slowing rate of inflation.
The tracking firm said the central bank’s policy statement “indicated the Fed is prepared to take action to reduce long-term interest rates in the coming months. With prospects of additional bond purchase stimulus, investors jumped into Treasuries driving bond yields and mortgage rates lower.”
This article is from DSNews.com.