30-Year Mortgage Drops Under Four Percent for First Time Ever

October 6, 2011 (Shirley Allen)

Average interest rates for the 30-year fixed rate mortgage dropped under four percent for the first time ever while the 15-year fixed rate mortgage set a new record low for the sixth consecutive week according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS)

Fixed Rate Mortgages (FRM):

The 30 year FRM set an all-time low averaging 3.94 percent with an average of 0.8 points, down from last week’s average of 4.01 percent. The 30 year FRM averaged 4.27 percent a year earlier.

The 15 year FRM also set a new low for the sixth week in a row, averaging 3.26 percent this week with an average 0.8 points, down from 3.28 percent reported the previous week, and down from 3.72 percent a year ago.

Adjustable Rate Mortgages (ARM):

ARM interest rates were mixed this week with the 5-year Treasury-indexed hybrid ARM averaging 2.96 percent, down from 3.02 percent last week, with an average of 0.6 points. The 5 year ARM averaged 3.47 percent a year earlier.

The 1-year Treasury-indexed ARM increased this week, averaging 2.95 percent this week with an average of 0.5 points, up from 2.83 percent the previous week. A year ago, the 1 year ARM averaged 3.40 percent.

Frank Nothaft, vice president and chief economist of Freddie Mac, stated, “Average 30-year conventional fixed mortgage rates fell below 4 percent for the first time in history this week following a sharp drop in 10-year Treasuries early in the week as concerns over a global recession grew. Average 15-year fixed rates fell to a record low in the PMMS as well. Interest rates for 1-year ARMs, however, rose, as the Fed began replacing $400 billion of its short-term Treasury securities, which serve as benchmarks for many ARMs. Also, in his testimony to Congress’s Joint Economic Committee on Tuesday, Federal Reserve Chairman Bernanke said the recovery is close to ‘faltering’ and stressed the need for lawmakers to act.”

“Meanwhile, the Bureau of Economic Analysis (BEA) reported consumer spending inched up 0.2 percent in August, while personal income fell 0.1 percent, the first decline since October 2009. Also, pending home sales declined for the second consecutive month in August, with some of the decline attributed to Hurricane Irene,” he added.

30-Year Fixed Rate Mortgages US NE SE NC SW W
Average 3.94 3.92 4.02 3.97 3.99 3.87
Fees & Points 0.8 0.8 0.9 0.6 0.8 0.9

15-Year Fixed Rate Mortgages US NE SE NC SW W
Average 3.26 3.27 3.29 3.26 3.32 3.22
Fees & Points 0.8 0.8 0.9 0.5 0.8 0.9

5/1-Year Adjustable Rate Mortgages US NE SE NC SW W
Average 2.96 3.02 2.92 3.16 2.95 2.81
Fees & Points 0.6 0.6 0.6 0.5 0.7 0.6
Margin 2.75 2.75 2.75 2.73 2.76 2.74

1-Year Adjustable Rate Mortgages US NE SE NC SW W
Average 2.95 3.00 2.81 3.48 2.71 2.77
Fees & Points 0.5 0.7 0.6 0.4 0.6 0.4
Margin 2.76 2.81 2.75 2.73 2.77 2.75

The National Mortgage Rate Snapshot One Year Ago One Week Ago
  30-YR 15-YR 5/1-YR 1-YR ARM 30-YR 15-YR 5/1-YR 1-YR ARM
Average 4.27   3.72   3.47   3.40   4.01   3.28   3.02   2.83  
Fees & Points 0.8   0.7   0.6   0.7   0.7   0.7   0.6   0.6  
Margin N/A N/A 2.74   2.77   N/A N/A 2.74   2.76  

Tags: 15 year fixed, 30 year fixed, fixed rate mortgage, freddie mac, interest rates, mortgage rates, 5-year hybrid, 1-year treasury

Source:
Freddie Mac