Nov
11

All Four Loan Types at Record Lows

November 11, 2010

As expected, mortgage rates fell to new record lows this week.

Last week, the Federal Reserve unveiled a plan to buy $600 billion in U.S. Treasury bonds. One of the goals of the controversial plan is to keep mortgage rates low.

Today, Freddie Mac released its weekly survey on mortgage rates for the week ending November 11.

The results:

percent sign with a down arrow*30-year fixed-rate mortgage (FRM): Averaged 4.17 percent, a record low.

*15-year FRM: Averaged 3.57 percent, a record low.

*5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM): Averaged 3.25 percent, a record low.

*1-year Treasury-indexed ARM: Averaged 3.26 percent, which ties the record low set last week.

Guess the plan is already working.

“Following the Federal Reserve November 3rd policy announcement that it plans to purchase up to $600 billion in government securities, Treasury bond yields initially fell and then gradually rose again,” said Freddie Mac vice president and chief economist, Frank Nothaft. “This allowed mortgage rates to fall to record levels this week.”

Wonder how close to 0 percent these mortgage rates will go. Experts say they aren’t likely to reach those depths, but remember, not even two years ago it seemed impossible for the 30-year FRM to near 4 percent.

Categories: Economy, Mortgages

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