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.

Source:  Chrystal Caruthers Author @ Realtor.com