30-Year Fixed Mortgage Rates Drop Below 4%

30-Year Fixed Mortgage Rates Drop Below 4%

Mortgage rates have gone from cheap to dirt cheap in the span of one week, thanks to fixed-rate home mortgages falling to below 4% and hitting new lows for the year.

Now, buyers can lock in the lowest rates of the year at 3.97% for a 30-year fixed-rate mortgage, down from 4.28% a year ago and 4.12% last week, according to Freddie Mac.

“Mortgage rates are down sharply following the decline in the 10-year Treasury yield for the second straight week,” said Frank Nothaft, vice president and chief economist at Freddie Mac, in a released statement.

The week’s mortgage rates mark the lowest level since June 2013, according to the report. Nothaft attributed the drop to “continued investor skepticism regarding the precarious economic situation in Europe.”

The 15-year fixed-rate mortgage also reached a new low at 3.18% down from 3.33% last week and 3.30% a year ago, according to Freddie Mac.

While mortgage rates are falling, home prices are rising, and 84% of people surveyed expect prices to go higher, according to the Bankrate’s Financial Security Index.

The decline in mortgage rates could spur more home sales this fall, although if positive economic and employment data continue to be reported, mortgage rates likely will rise, according to realtor.com® Chief Economist Jonathan Smoke.


Mortgage Rates Inch Up But Stay Near Year Lows

After weeks of holding steady at their lowest levels of the year, mortgage rates for most U.S. home loans saw marginal increases this week.

The average for a 30-year fixed-rate mortgage rose to 4.12% from 4.10% last week, according to the latest survey from mortgage buyer Freddie Mac.

A year ago at this time, the 30-year average was 4.57%.

“Mortgage rates were up slightly this week, following the increase in 10-year Treasury yields, despite last week’s disappointing employment report,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement.

“The U.S. economy added only 142,000 jobs in August, after a 212,000 gain in July and a 267,000 increase in June. The unemployment rate fell to 6.1% in August from 6.2% the previous month.”

The average rate on a 15-year fixed loan also rose this week, inching up to 3.26% from 3.24% last week. It averaged 3.59% at this time a year ago.

Similarly, averages for the two most popular hybrid adjustable-rate mortgages edged up slightly. The five-year ARM rose to 2.99% this week, from 2.97% last week. A year ago, it averaged 3.22%.

The one-year ARM average is trending at 2.45% this week, up from 2.40% last week. It was at 2.67% at this time last year.

Rates have fallen recently after rising at the end of 2013, when the Federal Reserve announced it would begin to curb its bond-buying stimulus program. The program has helped offset dramatic gains in real estate prices and kept affordability elevated while the market has stabilized.

In the latest Mortgage Rate Trend Index by Bankrate.com, 57% of the loan analysts polled believe mortgage rates will continue to hover around their current levels, while 29% predict rates will increase.

“Bond prices have slipped with the slightly better economic news,” said Derek Egeberg, branch manager at Academy Mortgage in Yuma, AZ. “Look for this trend to continue and for mortgage rates to slide higher through the end of the year.”

Source: http://www.realtor.com/news/mortgage-rates-inch-stay-near-years-lows/

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