Nov
26

A Great Gift: Lower Mortgage Rates

November 26, 2011

Just in time for the holidays: Mortgage rates have hit new lows.

For the week ending November 23, the 30-year fixed-rate mortgage dipped below 4 percent for only the second time in history, and both adjustable-rate mortgages averaged new record lows, according to Freddie Mac.

The historically low mortgage rates are spurring activity, though there are still barriers in the way of a recovery.

“Mortgage rates eased slightly this week with fixed-rate loans hovering above all-time lows and ARMs reaching a new nadir,” said Frank Nothaft, vice president and chief economist for Freddie Mac. “The high-degree of home-buyer affordability in recent months translated into a 1.4 percent pickup in existing home sales during October, according to the National Association of Realtors (NAR). The NAR also reported that contract cancellations were up in October as well, which restrained sales from achieving a stronger rebound.

“The Bureau of Economic Analysis revised third quarter GDP growth downward from an initial estimate of 2.5 percent to 2.0 percent. In addition, the Federal Reserve announced weaker business activity for November in its Philadelphia and Chicago districts.”

The mortgage-rate breakdown for the week ending November 23, according to Freddie Mac:

*30-year fixed-rate mortgage (FRM): Averaged 3.98 percent, down from last week’s 4.00 percent. Last year at this time, the 30-year FRM averaged 4.40 percent.

*15-year FRM: Averaged 3.30 percent, down from last week when it averaged 3.31 percent. A year ago at this time, the 15-year FRM averaged 3.77 percent.

*5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM): Averaged 2.91 percent this week, down from last week’s 2.97 percent. A year ago, the 5-year ARM averaged 3.45 percent.

1-year Treasury-indexed ARM: Averaged 2.79 percent, down from 2.98 percent last week. At this time last year, the 1-year ARM averaged 3.23 percent.

Categories: Economy

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