The 30-year fixed rate mortgage fell again to break the all-time low average, hitting 4.19% down .08 from last week, according to Freddie Mac. The last time rates were this low was in April of 1951, according to the Federal Housing Administration. The 30-year fixed mortgage has been under 5% for 23 straight weeks.
The record low rate has been falling for three weeks in a row after the Federal Reserve assured bankers that it was on the course to keep its primary lending rate low for a lengthy period of time in efforts to stimulate the U.S. economy. The 15-year fixed rate mortgage averaged a low of 3.62% with an average 0.7 point down from 3.72% last week. The tenth of a percent decline is a significant move for the bell weather indicator.
“Historically low rates have spurred yet another refinancing wave. Conventional mortgage applications for refinancing jumped 24% over the week of October 8th to the strongest pace since mid-April 2009, according to the Mortgage Bankers Association ,” said Freddie Mac chief economist Frank Nothaft .
“The Bureau of Economic Analysis estimates that homeowners held an average effective mortgage rate of 6.07% in the second quarter of 2010. By refinancing into this week’s 30-year fixed rate mortgage the average homeowner could save over $230 a month in principal and interest payments on a $200,000 loan balance.”
A 5-year Treasury indexed hybrid adjustable-rate mortgage averaged 3.47% for the week with an average 0.6 point, which tied last week. A year ago the same loan averaged 4.38%.
“September’s employment report held no big surprises to financial markets, allowing long-term bond yields and fix mortgage rates to continue to ease. As a result, both the 30-year and 15-year fixed mortgage rates hit all-time record lows for the third consecutive week,” said Nothaft. High unemployment and severe underemployment weigh heavily on the economy.