Mortgage rates sink to record lows again, Freddie Mac says
Home loan rates set record lows yet again this week in response to the Federal Reserve's plan to buy $600 billion in Treasury bonds, mortgage finance giant Freddie Mac said in its weekly report on rates.
Freddie Mac said Thursday that the lenders it surveyed were offering 30-year fixed-rate loans at an average of 4.17% with 0.8% in upfront lender fees, down from 4.24% last week and the survey's previous record of 4.19%, set on Oct. 14. Freddie Mac has been tracking the 30-year loan since 1971.
The lenders were offering 15-year fixed-rate loans at 3.57% with 0.8% in lender fees, down from 3.63% a week earlier and the previous record of 3.62% in the Oct. 14 survey. Freddie Mac began tracking 15-year loans in 1991.
For adjustable mortgages with rates fixed for the first five years, the average start rate was 3.25% with 0.7% in lenders fees, also a record for the survey.
Mortgage rates have been bumping around near historic lows since April, tracking a decline in the yields on U.S. Treasury bonds. Formally confirming an expected program aimed at stimulating the economy, the Fed said last week that it would buy $600 billion in Treasuries. That additional demand is expected to continue exerting downward pressure on Treasury yields, presumably keeping rates low on private debt such as corporate bonds and mortgages as well.
Freddie Mac surveys lenders across the nation each week from Monday through Wednesday, asking them for the combination of rates and fees they are providing on popular mortgages. The rates aren't available to all borrowers, just those with solid credit, enough verifiable income to support payments and 20% down payments for purchases or 20% home equity in the case of refinancing.
Well-qualified borrowers who shop around often obtain slightly better rates, and it's possible to lower the rates further by paying additional amounts known as discount points when the loan is originated.
-- E. Scott Reckard