30-Year Fixed Rate Mortgage Falls Below 3.50 Percent
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UPDATED: Jul 26, 2012
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In yet another weekly report by Freddie Mac the 30-year fixed home loan interest rate has broken historical records. The nation’s average 30-year rate dropped to 3.49 percent this week.
Last year at this time the 30-year mortgage interest rate averaged at 4.55 percent—a full percentage point higher than today’s average.
To put that in perspective, if a homebuyer purchased a house for $200,000 one year ago at 4.55 percent with no money down, he or she would have a monthly payment of $1,019.
If a homebuyer purchased that same $200,000 home today with no money down, he or she would have a monthly payment of $897.
That’s a savings of $122 every month, or $1,464 every year. Throughout the life of these two home loans, the one taken out at 3.49 percent would save more than $40,000 over the full 30-year term.
The 15-year home loan interest rate also set a record, averaging at 2.80 percent this week. One year ago, the 15-year rate was at 3.66 percent—more than the current 30-year interest rate.
“Market concerns over the strength of the economic recovery brought long-term Treasury yields to new lows this week allowing fixed mortgage rates to reach record levels,” said Frank Nothaft, Freddie Mac’s vice president and chief economist, in a statement.
Despite this persistent trend of record-breaking home loan interest rates, sales have yet to increase.
“New home sales fell in June to their lowest level since January of this year,” said Nothaft.
Average interest rates on adjustable rate mortgages (ARMs) rose slightly, but still remained near their record lows.
The 5-year Treasury-indexed ARM averaged at 2.74 percent, up from last week’s 2.69 percent.
The 1-year Treasury-indexed ARM was 2.71 percent, up from last week’s 2.69 percent.