Mortgage Rates Hit Record Lows

By:: Peter King | November 20, 2009

Mortgage rates fell again last week, hitting record lows in some weekly surveys.

Freddie Mac reported that the average interest rate on 15-year fixed-rate mortgages fell to 4.32 percent with 0.6 discount points for the week ending yesterday, the lowest rate since the government-supported lender began tracking the data back in 1991. Last week’s average was 4.36 percent; one year ago the average was 5.73 percent.

Meanwhile, the average interest rate on 30-year fixed-rate mortgages fell to their lowest level in six months. The average on 30-year loans dropped to 4.83 percent with 0.7 discount points, down from 4.91 percent the week before. One year ago, 30-year fixed rate mortgages were averaging 6.04 percent in the Freddie Mac survey.

The average on five-year Treasury indexed adjustable rate mortgages (ARMs) was reported at 4.25 percent with 0.6 discount points, down from 4.29 percent the week before and 5.87 percent one year ago.

Rates on 30-year fixed rate loans fell to an all-time low in the Bankrate mortgage rate survey for the same week, with rates averaging 5.06 percent, down from 5.19 percent the week before. It’s the lowest 30-year figure in the nearly 25 years of recordkeeping for Bankrate, whose results tend to run higher than other surveys due to differing survey methods.

“Low fixed rates throughout the third quarter prompted an estimated $1.1 trillion in refinancing activity, saving homeowners about $10 billion in aggregate monthly payments over the first 12 months of their new loan,” said Frank Nothaft, Freddie Mac chief economist. “ Moreover, for the fourth consecutive quarter, more than 95 percent of prime borrowers who originally had an ARM selected a conventional fixed-rate mortgage (when refinancing) in the third quarter of this year.”

However, the rush to refinance appears to be slackening despite the drop in interest rates in recent weeks. The Mortgage Bankers Association reported that mortgage applications fell during the week ending Friday, Nov. 13, with applications for both refinanced mortgages and new home purchases declining. The MBA’s Refinance Index was down a seasonally adjusted 1.4 percent from the week before, while the Purchase Index was down 4.7 percent.

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National Rates

Loan Type	Today	+/-
30 yr fixed	3.80
15 yr fixed	3.10
5/1 ARM	2.73

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