The Wall Street Journal
4 December 2009
Mortgage rates generally fell again this week, with the average rate on 30-year fixed-rate mortgages reaching the lowest level in at least 38 years, according to Freddie Mac’s weekly survey.
“Interest rates for 30-year and 15-year fixed-rate mortgages fell for the fifth consecutive week to an all-time low while the average rate on five-year (adjustable-rate mortgages) hovered near its record set in the previous week,” Frank Nothaft, Freddie’s chief economist, said Thursday.
Mortgage rates have been pushed lower by weak housing demand and rising foreclosures. In addition, Treasury prices have risen, indicating that investors and financial institutions are retreating from riskier bets, and sending yields lower. Mortgage rates tend to follow the yields.
Earlier this week, the National Association of Realtors said its forecasting gauge of housing-market activity climbed to its highest level in more than three years in October. Last week, the association said October sales of existing homes jumped 10% as buyers continued to take advantage of a first-time-home-buyer tax credit, low prices and low mortgage rates.
The 30-year fixed-rate mortgage averaged 4.71% for the week ended Thursday, down from last week’s 4.78% average and 5.53% a year ago. Rates on 15-year fixed-rate mortgages were 4.27%, down from last week’s prior low of 4.29% and 5.77% a year earlier. Freddie has tracked 15-year rates since 1991.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.19%, up from last week’s record low of 4.18% but were down from 5.77% a year earlier.
One-year Treasury-indexed ARMs were 4.25%, its lowest level since June 2005, down from 4.35% last week and 5.02% a year earlier.
To obtain the rates, the 30-year mortgage required payment of an average 0.7 point, while the rest required an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.