Tag Archives: Adjustable-rate mortgage

New Low For Mortgage Rates

2 Oct
A percent sign.

A percent sign. (Photo credit: Wikipedia)

The Federal Reserve’s new stimulus has sent mortgage rates plummeting.

Freddie Mac’s Primary Mortgage Market Survey showed new record lows in all categories except the 5-year adjustable-rate mortgage (ARM), which did show a decrease from the week before. The GSE reported that the 30-year fixed average fell to 3.40 percent (0.6 point) for the week ending September 27, down from 3.49 percent in the previous week’s survey.

The 15-year fixed also dropped, averaging 2.73 percent (0.6 point) – down from 2.77 percent.

The continuous drops add to an already amount of good news for the housing market.

“Fixed mortgage rates continued to decline this week, largely due to the Federal Reserve’s purchases of mortgage securities, and should support an already improving housing market,” said Frank Nothaft, VP chief economist for Freddie Mac. “For instance, the S&P/Case-Shiller 20-city home price index rose 1.2 percent over the 12 months ending in July, reflecting the largest annual increase since August 2010.”

Nothaft also pointed to new home sales, in particular the strong two-month pace set in July and August.

According to Bankrate’s weekly survey, the 30-year fixed average is down to 3.55 percent from 3.70 percent a week before. The 15-year fixed fell along with it, averaging 2.88 percent (from 2.95 percent previously). The 5/1 ARM also fell, but only slightly – it averaged 2.68 percent for the week, down from 2.69 percent a week ago.

Freddie Mac: MORTGAGE RATES CONTINUE TO DROP

27 Dec

Mortgage interest rates continue to head south. Freddie Mac reported last Thursday that the 30-year fixed-mortgage rate as well as adjustable rate products all sank to new all-time record lows this week, while the 15-year fixed rate settled in to match its historic low.

The 30-year fixed-rate mortgage averaged 3.91 percent (0.7 point) for the week ending December 22, dropping below last week’s previous record low mark of 3.94 percent. The average 30-year rate is now nearly a full percentage point below its level this time last year of 4.81 percent.

“Rates on 30-year fixed mortgages have been at or below 4 percent for the last eight weeks and now are almost 0.9 percentage points below where they were at the beginning of the year,” noted Frank Nothaft, Freddie Mac’s chief economist.

Nothaft says all those percentage basis points translate into $1,200 less a year on a $200,000 loan when you compare current rates versus borrowing costs 12 months ago.

The 15-year fixed rate matched last week’s all-time record low at 3.21 percent (0.8 point). A year ago at this time, the 15-year rate was averaging 4.15 percent.

Adjustable-rate mortgages (ARMs) also hit new all-time lows in Freddie Mac’s survey this week.

The GSE puts the average rate for a 5-year ARM at 2.85 percent (0.6 point) That’s down from 2.86 percent last week and 3.75 percent a year ago.

The 1-year ARM came in at 2.77 percent (0.6 point) this week, down from last week when it averaged 2.81 percent. At this time last year, the 1-year ARM was averaging 3.40 percent.

Nothaft says the greater homebuyer affordability afforded by today’s rock-bottom interest rates helped push existing home sales higher for the second consecutive month in November to an annualized pace of 4.42 million, the most since January.

Freddie’s chief economist also points to positive indicators in the new home sector, with construction of single-family showing a back-to-back monthly gain in November, with the largest increase since June, and homebuilder confidence in December rising to its highest reading since May 2010.