May 7, 2009

Almost Two Points Lower Than October Peak: 30 Year FRM Ties Record Low Reached Earlier in April

30-year fixed-rate mortgage: Averaged 4.78 percent with an average 0.7 point for the week ending April 30, 2009, down from last week when it averaged 4.80 percent. Last year at this time, the 30-year fixed-rate mortgage averaged 6.06 percent. The 30-year FRM now equals the record low that was set the week of April 2, 2009. It has never been recorded lower in Freddie Mac's survey, which goes back to 1970.

15-year fixed-rate mortgage: Averaged 4.48 percent with an average 0.7 point, unchanged for the third week in a row. A year ago at this time, the 15-year FRM averaged 5.59 percent. This is tied with the last two weeks for the lowest the 15-year FRM has been since Freddie Mac began tracking it in August 1991.

Five-year Treasury adjustable-rate mortgages ARMs:Averaged 4.80 percent this week, with an average 0.6 point, down from last week when it averaged 4.85 percent. A year ago, the 5-year ARM averaged 5.73 percent. This is the lowest the 5-year ARM has been since Freddie Mac began tracking it in January 2005.

One-year ARMs: Averaged 4.77 percent this week with an average 0.7 point, down from last week when it averaged 4.82 percent. At this time last year, the 1-year ARM averaged 5.29 percent.

Freddie Says:

Rates for fixed-rate mortgages hovered at record lows this week as ARM rates eased further, said Frank Nothaft, Freddie Mac vice president and chief economist. Mortgage rates for 30-year fixed rate mortgages, the most popular loan among homebuyers and families seeking to refinance, are more than 1.6 percentage points below the recent peak set at the end of October 2008. For a $200,000 loan, this means a monthly savings of almost $212 in mortgage payments or over $2,500 per year. In aggregate, borrowers who refinanced during the first quarter reduced their mortgage payments by about $2.5 billion over the coming year.

The housing market may be edging towards a bottom. Existing home sales stayed near its four-month average in March while new home sales were stronger than the market consensus. More importantly, the inventory of unsold new homes fell to the lowest number since January 2002. And, the S&P/Case-ShillerĂ‚® 20-city composite index did not show a record year-over-year decline in February for the first time since December 2006. Finally, housing affordability hit record highs in the first quarter of this year, according to figures from the National Association of Realtors, which date back to January 1971.

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Howard Bell
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