30-Year Fixed Rate Below 5%
Posted by Nancy Comenitz on Friday, October 2nd, 2009 at 9:18am.Rates on 30-year fixed-rate mortgages for borrowers with good credit fell below 5 percent this week for the first time since May, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey. The 30-year fixed-rate mortgage averaged 4.94 percent with an average 0.7 point. Last week the rate was 5.04 percent and 6.1 percent a year ago, Freddie Mac said. The 30-year fixed-rate last dipped below 5 percent during the week ending May 28, when it averaged 4.91 percent.
The 30-year fixed hit a record low in the records that date back to 1971, when it was 4.78 in April. This
was caused by a Federal Reserve program to purchase up to $1.25 trillion in mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginne Mae.The Fed has announced it will stretch those purchases out through the end of March rather than discontinuing the program at the end of the year as they had originally planned. Freddie Mac said rates on 15-year fixed-rate mortgages averaged 4.36 percent this week with an average 0.6 point, down. That's the lowest rate since Freddie Mac started tracking 15-year fixed-rate mortgages in 1991.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.42 percent with an average 0.6 point, down from 6 percent a year ago.
The one-year Treasury-indexed ARM averaged 4.49 percent with an average 0.5 point, down from 5.12 percent a year ago.
Applications for refinancings accounted for 65.3 percent of applications. Requests for adjustable-rate mortgage (ARM) loans accounted for 6.2 percent of all applications, the MBA said.
The Federal Open Market Committee met and said that there have been further improvement in thefinancial markets and activity in the housing sector has increased. Besides extending the deadline
for the mortgage-backed securities, the Committee will maintain the target range for the federal funds
rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
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