30-Year Mortgage Rates Drop Below 4%

For the first time ever, 30-year fixed-rate mortgages fell below 4 percent, Freddie Mac reported in its weekly mortgage market survey. In the last month mortgage rates have continued to set new weekly record lows, but the 30-year mortgages’ latest drop below 4 percent may be an important threshold for potential buyers. The 30-year mortgage is the most popular financing option of buyers. Mortgage rates are expected to stay well-below 5 percent through 2013, Fannie Mae economists are projecting. Home buyers taking out loans for purchase is expected to more than double in the next two years too, Inman News reports. Rates have continued to free-fall as concerns over a global recession grows, Frank Nothaft, Freddie Mac’s chief economist, said in a statement. Here’s a closer look at rates for the week ending Oct. 6. 30-year fixed-rate mortgages: averaged 3.94 percent this week, down from last week’s previous record low of 4.01 percent. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.27 percent. 15-year fixed-rate mortgages: averaged 3.26 percent, another all-time low. This is the sixth-consecutive week the 15-year mortgage has posted new average record lows. Last week, 15-year rates averaged 3.28 percent. Last year at this time, 15-year rates averaged 3.72 percent. 5-year adjustable-rate mortgages: averaged 2.96 percent this week, dropping from last week’s 3.02 percent. A year ago, the 5-year ARM averaged 3.47 percent. 1-year ARMs: averaged 2.95 percent, the only mortgage rate to move up last week. Last week, the 1-year ARM averaged 2.83 percent. A year ago, the 1-year ARM averaged 3.40 percent. By Melissa Dittmann Tracey, REALTOR® Magazine Daily News