The Wall Street Journal

11 November  2011

For the second time in history—and the second time in as many months—average rates on 30-year fixed-rate mortgages fell below 4%.

After falling to an average 3.94% on a 30-year fixed mortgage in the week ending Oct. 6, rates had ticked back up over the past month.

Now, amid mixed signals about the health of the U.S. economy, rates on the 30-year mortgage fell to average 3.99% for the week ending Nov. 10, down from 4% last week and 4.17% a year ago, according to Freddie Mac’s latest survey of conforming mortgage rates.

“The economy added 80,000 net jobs in October, below the market consensus forecast, but employment gains over the prior two months were revised up by 102,000 and the unemployment rate fell to 9.0%, the lowest in six months,” said Freddie Mac Chief Economist Frank Nothaft.

Mr. Nothaft added that while one recent report showed improvement in factory orders, a separate reading also showed expansion slowed in the service industry last month.

Low home prices and mortgage rates have kept affordability high, Mr. Nothaft said, adding that the National Association of Realtors’ housing affordability index in September hit its third highest reading on record.

Rates on 15-year fixed-rate mortgages also dropped slightly, averaging 3.3% this week, down from 3.31% last week and 3.57% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.98% this week, up slightly from 2.96% last week. The ARM averaged 3.25% a year ago.

And 1-year Treasury-indexed ARMs averaged 2.95% this week, up from 2.88% last week. The ARM averaged 3.26% a year ago.

To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.7 of a point, the 15-year fixed-rate mortgage required an average 0.8 point and the ARMs required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.