Mortgage Rates Set New Record Lows in Freddie Mac Survey

Mortgage Rates Set New Record Lows in Freddie Mac Survey

Interest rates on home loans sunk to new lows this week, according to figures released by Freddie Mac Thursday.

Although rates have been hovering near their lowest levels in more than a half-century for some time now, the GSE’s chief economist, Frank Nothaft, expressed concern that they’ve done little to pull would-be buyers from the sidelines as the housing recovery continues to slow.

Freddie Mac surveyed about 125 lenders from across the country and found that average interest rates on 30-year fixed-rate mortgages dropped to 4.17 percent (0.8 point) for the week ending November 11. That’s down from last week’s average of 4.24 percent.

Rates for 15-year fixed mortgages averaged 3.57 percent (0.8 point) this week, down from 3.63 percent reported by Freddie the week prior.

The 5-year adjustable-rate mortgage (ARM) dropped from 3.39 percent to 3.25 percent (0.7 point), while the 1-year ARM remained unchanged at 3.26 percent (0.7 point).

Rates for all the loan products tracked by Freddie Mac were reported to set new all-time lows in the GSE’s survey.

“Following the Federal Reserve November 3rd policy announcement that it plans to purchase up to $600 billion in government securities, Treasury bond yields initially fell and then gradually rose again. This allowed mortgage rates to fall to record levels this week,” Nothaft explained.

The Fed’s decision to pump more capital into the nation’s sluggish economy is intended to keep interest rates low in the hopes of sparking economic growth. The central bank

bought $1.7 trillion in mortgage-backed securities (MBS), GSE debt, and Treasury bonds from November 2008 to March of this year, and that effort did prove successful in pushing mortgage interest rates down.

How low can interest rates go? How long should they remain low? We continue to read news stories about how the rates have reached all time lows over and over. Great time to buy. Seems a lot of buyers aren’t motivated by the low rates. It’s when they start to creep up that they jump of the fence so they don’t miss the boat.

Posted on Calabasas Homes-Calabasas Real estate – Santa Monica Homes-Santa Monica Real Estate

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