Mortgage Rates Continued to Decline Last Week
Published: Wednesday, 25 Nov 2009 | 10:22 AM ET
Rates on 30-year mortgages dropped in the past week to match a record low set in April, while the 15-year home loan rate fell to a new all-time low, home funding company Freddie Mac said on Wednesday.
The average 30-year rate dropped 0.05 percentage point to 4.78 percent in the week ended Nov. 25, equaling the lowest rate since Freddie Mac started tracking rates weekly in 1971.
"Interest rates for 30-year fixed-rate loans are currently 0.8 percentage points below this year's peak set in mid-June, which shaves roughly $100 off the monthly payments on a $200,000 mortgage," Frank Nothaft, Freddie Mac chief economist, said in a statement.
Fifteen-year mortgage rates dipped 0.03 percentage point in the week to 4.29 percent, the lowest since Freddie Mac began tracking them weekly in 1991.
A year ago, the 30-year mortgage rate averaged 5.97 percent and the 15-year rate stood at 5.74 percent.
Sinking rates come as the government enters the final months of massive interventions in the financial markets aimed at cutting borrowing costs to revive housing and the economy.
The Federal Reserve is scheduled to complete more than $1.7 trillion in mortgage-related and Treasury securities purchases by March 31.
The newest test of record low borrowing costs comes just as the Obama administration this month extended another key housing incentive, an $8,000 first-time homebuyer tax credit, and added a $6,500 credit aimed at current homeowners looking to move.
Long-term mortgage rates have fallen for four straight weeks, according to Freddie Mac.
Lenders charged an average 0.7 point in fees on the 30-year mortgage and 0.6 point on the 15-year loan, unchanged in the week.
Borrowing costs were unchanged to lower for adjustable-rate mortgage (ARM) products in the past week. The one-year Treasury-indexed ARM flat at 4.35 percent.
The five-year Treasury-indexed hybrid ARM declined 0.07 point to 4.18 percent, the lowest since Freddie Mac started tracking them in 2005.