Mortgage Rates Hit New All-Time Lows

By:: Peter King | January 12, 2012

Mortgage rates fell again this week, hitting new record lows across the board, according to new figures released today by Freddie Mac.

The lowest mortgage rates ever were reported for both fixed- and adjustable-rate mortgages, according to Freddie Mac, which has been tracking rate information since 1971. Average interest rates on “standard” 30-year fixed-rate mortgages fell to 3.89 percent, breaking last week’s record-tying level of 3.91 percent.

Interest rates on 15-year fixed-rate mortgages also fell to a new low, hitting 3.16 percent, down from 3.23 percent last week and exceeding the previous record of 3.21 percent first set the week of Dec. 15, 2011. Initial interest rates on 5-year adjustable rate mortgages (ARMs) fell to a new record low of 2.82 percent, down from the previous record of 2.86 percent set just last week.

The drop in rates comes despite widespread expectations that rates will soon show at least a small increase once the impact of additional government fees take effect in late January or early February. Congress imposed the fees in December to help defray the cost of extending the cut in Social Security taxes.

“Mortgage rates eased slightly this week to all-time record lows following mixed indicators in the labor market,” said Frank Nothaft, Freddie Mac chief economist. He noted that while the economy added 1.6 million jobs last year, its strongest performance in five years, unemployment remains high by historical standards, while most industries engaged in only limited permanent hiring toward the end of the year, according to figures from the Federal Reserve.

Rates are based on loans with an 80 percent loan-to-value ratio, with average origination fees and discounts of 0.7 points on 30-year loans and 5-year ARMs, and 0.8 points on 15-year home loans.

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National Rates

Loan Type	Today	+/-
30 yr fixed	3.72
15 yr fixed	3.03
5/1 ARM	2.75

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