Mortgage Rates Fall To A New Record

Yahoo Finance – 30-year mortgage below 4 pct. for first time ever
The average rate on the 30-year fixed mortgage this week fell below 4 percent for the first time ever, to 3.94 percent. For those who can qualify, it’s an extraordinary opportunity to buy a home or refinance. On Thursday, Freddie Mac said the average rate dropped from 4.01 percent last week, the previous low. The average rate on a 15-year fixed loan, a popular refinancing option, dipped to 3.26 percent, also a record. The 15-year loan has fallen for six straight weeks. Mortgage rates are now lower than they were in the early 1950s, when the average rate reached 4.08 percent for a few months, according to the National Bureau of Economic Research. Back then, mortgages typically lasted just 20 or 25 years. Still, rates have been below 5 percent for all but two weeks in the past year and that has done little to boost home sales. This year is shaping up to be among the worst for sales of previously occupied homes in 14 years. “Interest rates are obviously not an impediment to housing. It’s uncertainty about the economy, about jobs, about incomes,” said Mark Vitner, senior economist at Wells Fargo. “It’s not a question of affordability. It’s simply a lack of wherewithal to buy a home or a lack of confidence to commit to buying one.” Many people are reluctant to take the risk in this market. High unemployment, scant pay raises and heavy debt loads are deterring many would-be buyers.

Source:
Bianco Research, LLC.
October 7, 2011

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