Fourth Consecutive Week of Interest Rates At or Below 4 Percent
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UPDATED: Nov 25, 2011
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This is the fourth week in a row that 30-year fixed rates have averaged at or below 4 percent, according to a Freddie Mac press release.
Freddie Mac’s Weekly Primary Mortgage Market Survey (PMMS) reports that the rate for fixed rate mortgages averaged at 3.98 percent this week. When compared to this time last year, that is down by nearly 0.50 percent.
The average 15-year fixed mortgage rate is at 3.30 percent. That’s down 0.53 percent from this time last year.
Both 30- and 15-year fixed mortgages carried an average of 0.7 points.
While fixed mortgage rates hover around their historic low numbers, the PMMS reveals good news for adjustable-rate mortgages (ARMs) as well, as they hit record breaking lows this week. The 5-year Treasury-indexed hybrid ARM averaged at 2.91 percent, and the 1-year ARM averaged at 2.79 percent. Both had an average of 0.6 points.
These recent low rates have caused a small uptick in home purchases, as this buyer’s market is unlike any we have seen in years. The positive impact this has had on the housing market was commented on by Freddie Mac’s vice president Frank Nothaft. He explained “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.”
However, the Mortgage Bankers Association (MBA) reports that uptick in October hasn’t maintained its momentum, as mortgage applications have dropped 1.2 percent last week when compared to the previous week.
Michael Fratantoni, the MBA’s vice president of research and economics elaborated on this slowdown by explaining that “purchase activity remains almost 5 percent below last year’s level.”