December 4, 2009
Interest rates for a 30-year fixed-rate mortgage have hit their lowest level in nearly 29 years.
In its Primary Mortgage Market Survey, Mortgage giant Freddie Mac says the long-term FRM averaged 4.71 percent, with an average 0.7 point for the week ending December 3, compared with 4.78 percent last week. The 30-year has never been this low since Freddie Mac began its weekly survey in 1971. Last year at this time, the 30-year FRM averaged 5.53 percent.
The rate for the 15-year mortgage, popularly used in refinancings, dropped to an average 4.27 percent with an average 0.6 point, from last week when it averaged 4.29 percent. A year ago at this time, the 15-year FRM averaged 5.77 percent. The 15-year rate has not been this low since Freddie Mac started tracking it in 1991, and breaks the record low set last week.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage, or ARM, rose slightly to an average 4.19 percent this week, with an average 0.6 point, from its rate of 4.18 percent last week. A year ago, the 5-year ARM averaged 5.77 percent.
The 1-year Treasury-indexed ARM averaged 4.25 percent this week with an average 0.6 point, down from last week when it averaged 4.35 percent. At this time last year, the 1-year ARM averaged 5.02 percent. The 1-year ARM has not been this low since the week ending June 30, 2005, when it averaged 4.24 percent.
"Interest rates for 30-year and 15-year fixed-rate mortgages fell for the fifth consecutive week to an all-time record low while the average rate on 5-year ARMs hovered near its record set in the previous week," said Frank Nothaft, Freddie Mac vice president and chief economist. "In addition, interest rates on 30-year and 15-year fixed mortgages thus far in 2009 averaged one percentage point below their respective average in 2008.
Nothaft says low mortgage rates and the cumulative decline in house prices have contributed to "an extremely affordable housing market" and helped spur home sales this year.
Total new and existing home sales in October were 36 percent higher than their January low on a seasonally adjusted, annualized rate, according to the U.S. Census Bureau and the National Association of Realtors (NAR). NAR also reported that pending existing home sales rose for the ninth straight month in October, representing the longest consecutive gain since the series began in 2001.
