Mortgage Loan Interest Rates Fall
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UPDATED: Feb 9, 2021
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Freddie Mac’s Primary Mortgage Market Survey revealed that interest rates hovered around all-time record lows. This, of course, allows prospective homebuyers to enjoy market affordability.
The average 30-year fixed mortgage loan interest rate matched its record low at 3.49 percent while the average 15-year fixed mortgage loan interest rate plummeted to a new all-time low of 2.77 percent.
The 5-year Treasury-indexed hybrid mortgage rate rose from 2.72 as of last week to 2.75 percent this week. Compared to one year ago, 5-year adjustable-rate-mortgages averaged 3.02 percent.
1-year Treasury-indexed adjustable-rate mortgages held steady from last week to this week at 2.61 percent. Compared to a year ago, 1-year adjustable-rate-mortgages averaged 2.82 percent.
Officials at Freddie Mac commented on the mortgage loan interest rates and how it relates to prospective homebuyers who may see this an opportune time to purchase the American Dream.
“Following the Federal Reserve’s announcement of a new bond purchase plan, yields on mortgage backed securities fell bringing average fixed mortgage rates to their all-time record lows which should aid in the ongoing housing recovery. New construction on one-family homes rebounded in August, rising by 5.5 percent to the fastest pace since April 2012. In addition, existing home sales increased by 7.8 percent in August to its strongest pace since May 2010,” said vice president and chief economist at Freddie Mac Frank Nothaft in a statement.
Economic influencing factors—such as the upcoming Presidential Election, the ongoing Euro crisis, the lingering recession, and the Chinese economic slowdown—have brewed global economic uncertainty in the minds of investors while influencing mortgage loan interest rates.
As the global economic situation fails to improve, if not worsen— as is the case with nations such as Greece—bond traders are flocking to “safe-havens” such as the United States stock and bond markets. This “flight to quality” results in bond and stock price increases while mortgage loan interest rates decrease.
At a Federal Reserve retreat in Jackson Hole, Wyoming, Chairman Ben Bernanke stated that mortgage loan interest rates would remain low through 2014, according to the Chicago Tribune. Borrowers would be wise to borrow a loan for a house while these historically low mortgage loan interest rate levels remain stable.