Mortgage rates fell once again in the week ending March 26, hitting another record low, according to Freddie Mac’s (FRE) Primary Mortgage Market Survey released Thursday. 30-year fixed-rate mortgages averaged 4.85 percent with an average 0.7 point, down from last week’s 4.98 percent average, and clearly below the average last year at this time — 5.85 percent. “The Federal Reserve’s announcement that it intends to purchase Treasury securities over the next six months caused bond yields to drop and mortgage rates followed,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Rates for 30-Yr FRMs peaked last year at 6.63 percent on July 24th. With this week’s 30-Yr FRM, the interest rate difference is almost 2 percentage points, which amounts to a savings of about $225 in monthly mortgage payments for a $200,000 loan.” This week’s average 15-year fixed-rate mortgage has never been lower in the life of Freddie Mac’s weekly survey, which dates back to 1991, dropping from 4.61 last week to 4.58 this week, according to the company. At this time last year, the 15-year FRM averaged 5.34 percent. The survey found Five-year Treasury-indexed ARMs took a fall this week as well, averaging 4.96 percent compared to 4.98 percent last week, while One-year Treasury-indexed arms dropped from 4.91 percent to 4.85 percent. “[P]otential homebuyers are taking notice of these historically low mortgage rates,” Nothaft said. “Both new and existing home sales rose 5 percent in February. First-time homebuyers accounted for half of all existing home sales, according to the National Association of Realtors.” A separate rates survey conducted by Bankrate.com found that mortgage rates this week actually hit their lowest point since the Eisenhower era — yes, the 1950s! According to Bankrate, the benchmark 30-year fixed-rate fell 10 basis points to 5.19 percent, while the benchmark 15-year fixed-rate fell 6 basis points to 4.8 percent. Needless to say, homeowners looking to refinance took advantage of the record-low rates. The Mortgage Bankers Association reported last week that home loan applications jumped by more than 30 percent, four-fifths of which were for refinances. Write to Kelly Curran at email@example.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade
Mortgage Rates: How Low Can They Go?
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