It seems like only a few weeks ago that mortgage rates were near all time lows, but now they’ve actually hit new lows. The new record low rate for a 30 year fixed mortgage is 4.71%. Much of the cause for this record drop is the historically sluggish housing market and government efforts to spur an increase in home buying.
For example, the Federal Reserve has released over $1 trillion into mortgage-backed securities in an effort to lower mortgage rates. It seems like those efforts are working, but that infusion of cash is set to end next spring. It’s unlikely that home sales will be sustainable if unemployment also remains a record levels, so we’ll have to see if the fed will try something new at that point or just leave well enough alone.
Even though rates have dropped, qualifying for a loan is tougher than it has been in a very long time. Still, if you have good credit and 20% for a down payment, you should be able to snag rates close to these for some time to come.
Other rates.
The average rate for a 15 year fixed mortgage is also at a record low 4.27%, down from 4.29% just a week ago.
5 year ARMs average about 4.19% and this is actually up from 4.18% last week. 1 year ARM rates also fell to 4.25%, so it’s interesting that 5 year ARMs were up, albeit a very small amount.
All of this rate dropping has led to increased mortgage applications and refinancing. The Mortgage Bankers Association reports that mortgage applications are up 2% from a week earlier, due to an increase of more than 4% in purchase applications, and a 2% increase in mortgage refinancing applications on existing loans.
This is awesome to me. I’m in the market for a 30yr fixed loan for a new home and I’m having fun browsing all the different companies. Gotta get one fast to pay for my new house.