30-Year Mortgage Rates Hit Record Low

Mortgage rates posted mixed results this week, but the benchmark conforming 30-year fixed mortgage rate fell to a record low of 4.41 percent, according to Bankrate.com’s weekly national survey. The average 30-year fixed mortgage has an average of 0.43 discount and origination points. The previous record low of 4.42 percent was set in October and November of 2010.

The average 15-year fixed mortgage increased to 3.63 percent while the larger jumbo 30-year fixed rate bounced to 4.94 percent. Adjustable rate mortgages were mostly lower, with the average five-year ARM dropping to 3.12 percent and the 7-year ARM sinking to 3.27 percent. Both are record lows.

Prevailing economic concerns have kept mortgage rates at historically low levels. The average 30-year fixed mortgage rate has been below five percent in all but 11 weeks during the past year, and never as low as this week. A widely anticipated speech by Fed Chairman Ben Bernanke and a full slate of economic data in the next 10 days will steer perceptions about the economy as well as the direction of mortgage rates.

The last time mortgage rates were above six percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.41 percent, the monthly payment for the same size loan would be $1,002.70, a difference of $239 per month for anyone refinancing now.

Survey Results
• 30-year fixed: 4.41% — down from 4.45% last week (avg. points: 0.43)
• 15-year fixed: 3.63% — up from 3.58% last week (avg. points: 0.32)
• 5/1 ARM: 3.12% — down from 3.15% last week (avg. points: 0.36)

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week’s move in mortgage rates, go to http://www.bankrate.com.

5 Predictions for 2011

Daily Real Estate News | December 10, 2010 | Share
5 Predictions for 2011
Freddie Mac analysts point to five features that they believe will likely characterize the 2011 housing and mortgage markets:

1. Low mortgage rates. With Fed observers expecting the central bank to keep the federal funds rate at its current target range of 0 percent to 0.25 percent for most (or all) of 2011, relatively low mortgage rates will be a feature of the 2011 mortgage market. Thirty-year fixed-rate loans are likely to remain below 5 percent throughout the year, and initial rates of 5/1 hybrid adjustable-rate mortgages will likely remain below 4 percent in 2011.

2. Prices have hit bottom. House prices are likely to begin a gradual, but sustained recovery in the second half of 2011.

3. Housing will remain affordable. With affordability high, many first-time buyers will be attracted to the housing market in the New Year, likely translating into more home sales in 2011 than in 2010.

4. Refinances will dwindle. Many eligible borrowers have already refinanced and the federal Making Home Affordable refinance program is expiring on June 30. While fixed-rate loans are likely to remain low, they will move up gradually, making it even less likely that refinances will be attractive to most home owners.

5. Delinquency rates will decline. Based on the last several business cycles, the share of loans that are 90 or more days delinquent or in foreclosure proceedings — known as the "seriously delinquent rate" — generally crests within a year of the start of the recovery in payroll employment, and this economic recovery appears to fit within that pattern. Payrolls began to rise last January, and by the spring the seriously delinquent rate had begun to fall.

Source: Freddie Mac (12/09/2010)