Mortgage Rates At or Near Record Lows - Again

By:: Kara Johnson | May 27, 2010

Mortgage rates fell again this past week, hitting record or near-record lows, according to the weekly Freddie Mac survey.

Interest rates on the standard 30-year fixed rate mortgage fell six basis points to an average of 4.78 percent, the second-lowest rate ever recorded since the government-supported lender began tracking rates in 1971. It is exceeded only by the all-time low of 4.71 percent reported for the week ending Dec. 3, 2009, although the 4.78 figure has been hit three times before, all in the spring and fall of 2009.

In addition, the average on the increasingly popular 15-year fixed rate mortgage fell to another all-time low, dropping to 4.21 percent from last week’s previous record of 4.24 percent. It’s the lowest the 15-year rate since Freddie Mac began tracking that particular item in 1991.

By contrast, 5-year Treasury indexed adjustable-rate mortgages (ARMs) were up for the week, rising 6 basis points to an average initial rate of 3.97 percent.

“These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively.”

Yesterday, Freddie Mac released its Conventional Home Price Index, which showed that U.S. home prices declined 1.1 percent over the past year, from the first quarter of 2009 to the first quarter of 2010. That’s contrary to figures released earlier this week by Standard & Poor’s, whose 20-city survey showed a 2 percent annual increase in prices. The Freddie Mac survey is based on all sales using conventional loans, whereas the S&P survey looks at repeat sales of the same properties over time in selected communities.

Interest rates on 15-year fixed-rate loans and 5-year ARMs continue to be well below where they were one year ago, while the 30-year loan is moderately lower than the already impressive lows it was at one year ago this time.

The 5-year ARM was nearly a full percentage point higher one year ago this week, at an average of 4.82 percent, while the15-year rate was more than a quarter-percentage point higher, at 4.53 percent. The 30-year rate averaged 4.91 percent, or 13 basis points higher.

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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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