Rates on 30-year mortgages hit record low

15-year fixed-rate mortgages also ties lowest rate on record

CHICAGO (MarketWatch) — Interest rates charged on 30-year fixed-rate mortgages hit a record low this week, averaging 3.91%, according to Freddie Mac’s weekly survey of conforming mortgage rates.

“Rates on 30-year fixed mortgages have been at or below 4% for the last eight weeks and now are almost 0.9 percentage point below where they were at the beginning of the year, which means that today’s home buyers are paying over $1,200 less per year on a $200,000 loan,” said Frank Nothaft, vice president and chief economist of Freddie Mac, in a news release.

mortgage ratesThe mortgage averaged 3.94% last week and 4.81% a year ago, according to the survey.

Meanwhile, rates on the 15-year fixed-rate mortgage tied a record low set last week, averaging 3.21% for the week ending Dec. 22. The mortgage averaged 4.15% a year ago.

Meanwhile, 5-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.85%, down from 2.86% last week and 3.75% a year ago. And 1-year Treasury-indexed ARMs averaged 2.77% this week, down from 2.81% last week and 3.4% a year ago.

To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.7 of a point, the 15-year fixed-rate mortgage required an average 0.8 point and the ARMs required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

The low rates are increasing affordability and helped existing-home sales to rise for the second month in a row in November, Nothaft said. Read more: Existing-home sales revised down 14% between 2007 and 2010, according to Realtors.

New construction of single-family homes also increased in November for the second month in a row, and home builder confidence rose in December to its highest reading since May 2010, he said, summarizing housing-related data reported earlier this week.

Amy Hoak is a MarketWatch reporter based in Chicago. This article can be viewed online at www.MarketWatch.com.

Renee West
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Renee West

Broker Associate at Villa Real Estate
I'm a real estate broker associate in Newport Beach & Corona del Mar, CA, with Villa Real Estate.
Contact me at (714) 914 9060 or rwest@villarealestate.com for all your real estate wants and needs.
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