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Friday, February 17, 2012

30 year mortgage low

30 year mortgage low

The average rate on the 30-year fixed mortgage held steady at a record low for a third straight week, offering more incentive to those looking to buy a home or refinance.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year home loan was unchanged at 3.87 percent. That's the lowest level since long-term mortgages began in the 1950s
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The average fixed mortgage rates are at or near all-time lows, Freddie Mac said Wednesday.

The 30-year fixed rate of 3.94 percent matched a record low set Oct. 6, and the 15-year fixed rate of 3.21 percent set a record low, the Federal Home Loan Mortgage Corp.'s Primary Mortgage Market Survey for the week ending Thursday indicated.

A 5-year adjustable rate mortgage had 2.86 percent rate for the week, setting a record, Freddie Mac said.

"Mortgage rates were at or near all-time record lows this week amid a rough environment for housing," said Frank Nothaft, Freddie Mac vice president and chief economist.

Nothaft noted that the Federal Reserve reiterated Monday that the U.S. housing market remained depressed.

"Over the first nine months of 2012, households lost almost $400 billion in property values which contributed to a $1.4 trillion reduction in overall net worth," Nothaft said.
For those who can qualify, it's an extraordinary opportunity to buy or refinance. And mortgage rates could fall even further now that the Federal Reserve plans to reshuffle its portfolio of securities to try and lower long-term rates.
On Thursday, Freddie Mac said the average rate on a 30-year fixed mortgage dropped from 4.01% last week, the previous low. The average rate on a 15-year fixed loan, a popular refinancing option, dipped to 3.26%, also a record.Still, rates have been below 5% for all but two weeks in the past year and have done little to boost home sales. This year is shaping up to be among the worst for sales of previously occupied homes in 14 years.
Many people are reluctant to take the risk in this market. High unemployment, scant pay raises and heavy debt loads are deterring many would-be buyers.
Others can't qualify for the historically low rates. Banks are insisting on higher credit scores. And many want first-time buyers to put down 20%. Few people have that much cash or home equity to satisfy the requirement.
Mortgage rates have tumbled because they tend to track the yield on the 10-year Treasury note. The yield has fallen in recent weeks, largely because investors are worried about the U.S. economy and the debt crisis in Europe. So they have shifted their money out of stocks and into the safety of Treasuries.A drop in mortgage rates could provide some help to the economy if more people could refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.
Consider a homeowner who owes $250,000 and is paying 5.09% on a 30-year fixed mortgage. That was the average rate being offered in January 2010. Refinancing the loan at 3.94 percent could save him or her more than $2,000 a year.
But many homeowners with good jobs and stable finances have already refinanced over the past year. Most economists say rates would need to fall at least a full percentage point before it makes sense to refinance again.
The reason is homeowners typically pay a few thousand dollars in closing costs when they refinance. And the low rates being offered don't include extra fees, known as points, which many borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year and 15-year rose to 0.8. The average fees for both the five-year and one-year adjustable-rate loans were 0.6 and 0.5, respectively.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
The average rate on the 30-year fixed mortgage fell again this week to a record low. The eighth record low in a year is attracting few takers because most who can afford to buy or refinance have already done so.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year fixed mortgage dipped to 3.88 percent this week, down from the old record of 3.89 percent one week ago.

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