Mortgage interest rates dip lower still
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
Mortgage rates continued their tumble to near-record lows this week as fallout from the European debt crisis and dormant inflation proved to be boons for Americans buying or refinancing homes.
Investor flight to the safety of U.S. government securities has pushed yields down on Treasury bonds. And mortgage rates have followed, as they usually do, with lenders offering an average of 4.84% on a 30-year fixed home loan in Freddie Mac’s latest weekly survey.
That was down from 4.93% a week earlier and the lowest since December.
The lenders, surveyed Monday through Wednesday, said they were offering 4.24% on average for a fixed-rate, 15-year home loan. These mortgages are popular with homeowners refinancing to retire their debts faster, and the interest rate on them was the lowest since Freddie Mac began surveying 15-year loans in August 1991.
The rates also have been pushed down by a U.S. inflation rate that the government said Wednesday had dropped to a 44-year low of about 1%.
The low rates, stabilization of home prices and home-buyer tax credits provided in government stimulus packages have reinvigorated business for Laguna Niguel loan broker Jeff Lazerson, who said he had ‘one foot in the mortgage broker graveyard’ for most of the first quarter.
‘Miracles happen. My business is back from the dead,’ Lazerson said Thursday morning. ‘It’s like I’ve awakened from a horrible nightmare that ended in April.’
Even the expiration of the federal home-buyer tax credits at the end of April hasn’t dampened business, Lazerson said. He reported having written three purchase loan along with two refinances in the last two days.
‘Not one buyer asked me about the tax-credit opportunity,’ Lazerson said.
Freddie Mac, the big mortgage company that nearly collapsed during the financial crisis and is now controlled by the government, said borrowers in its survey would have paid the lenders 0.7% of the loan amount in upfront fees on fixed-rate loans.
Freddie Mac quotes offering rates for loans to well-qualified buyers able to make at least a 20% down payment or who have 20% equity in their homes if they are refinancing.
It said the five-year Treasury-indexed hybrid adjustable-rate mortgage -- a tongue-twisting name for a loan with a fixed rate the first five years -- averaged 3.91% this week, with 0.6% of the loan amount paid in upfront lender fees.
Industry professionals say well-qualified borrowers can often obtain mortgages at lower rates than those in the Freddie Mac surveys.
The Free Rate Update website, which tracks wholesale mortgage rates, said such borrowers with 20% down payments were able to obtain 30-year loans at 4.5% Thursday and 15-year loans at 4.0% by paying 0.7% to 1% in upfront fees.
-- E. Scott Reckard
