Mortgage Rates Drop Closer to All-Time Lows

After rising last week following positive housing indicators, mortgage rates fell back near all-time lows once again this week, Freddie Mac reports in its weekly mortgage market survey.

"Fixed mortgage rates bottomed out in January and February of this year, which is helping spur the housing market,” said Frank Nothaft, Freddie Mac’s chief economist.

This week, the National Association of REALTORS® reported that pending home sales increased in January, reaching its strongest pace since April 2010. The Federal Reserve also noted that real estate activity in the residential sector increased modestly in most of the districts it tracks and that home sales increased.

Here’s a closer look at rates for the week ending March 1, 2012:

•30-year fixed-rate mortgages: averaged 3.90 percent, with an average 0.8 point, dropping from last week’s 3.95 percent average. A year ago at this time, 30-year rates averaged 4.87 percent.
•15-year fixed-rate mortgages: averaged 3.17 percent, with an average 0.8 point, dropping from 3.19 percent last week. Last year, 15-year rates averaged 4.15 percent.
•5-year adjustable-rate mortgages: averaged 2.83 percent, with an average 0.7 point, rising from last week’s 2.80 percent average. Last year, 5-year ARMs averaged 3.72 percent.
•1-year ARMs: averaged 2.72 percent, with an average 0.6 point, this week, dropping slightly from last week’s 2.73 percent average. A year ago, 1-year ARMs averaged 3.23 percent.
Source: Freddie Mac