E-mail updates
Follow on Twitter
Subscribe to RSS
By Derek Kravitz, The Associated Press
The average rate on the 30-year fixed mortgage hovered above its record low for a sixth straight week. But the super-low rates aren't providing a lift to the struggling housing market.
Freddie Mac said Thursday the rate on the 30-year home loan ticked down to 3.99 percent from 4 percent the previous week. It dropped to a record low of 3.94 nine weeks ago, according to the National Bureau of Economic Research.
The average rate on the 15-year fixed mortgage was edged down to 3.27 percent from 3.30 percent. Nine weeks ago, it too hit a record low of 3.26 percent.
Rates have been below 5 percent for all but two weeks this year. Yet this year could be the worst for home sales in 14 years.
Mortgage rates tend to follow the yield on 10-year Treasury note. The yield rose this week after investors, encouraged by central banks' joint effort to ease lending standards, shifted their money into stocks. Treasury yields rise when buying activity decreases.
Low mortgage rates haven't translated into more home sales. Sales of previously occupied homes are just slightly ahead of last year's dismal sales figures — the worst in 13 years. New-home sales appear headed to their worst year on records dating back half a century.
Mortgage applications rose nearly 13 percent last week but that's up from extremely low levels, according to the Mortgage Bankers Association.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many Americans don't want to sink money into a home that could lose value over the next three to four years.
The low rates have caused a modest boom in refinancing last week. But since the average rate on the 30-year fixed loan has been below 5 percent for all but two weeks in the past year, most homeowners who can afford to refinance already have.
Some lenders say they are seeing an increase in applications through the Obama administration's refinancing program, which was broadened in October to allow up to 1 million more homeowners lower their monthly mortgage payments. But the Mortgage Bankers Association said such government-assisted loans account for only a small portion of refinancing applications.
The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan was unchanged at 0.7 and the fee on the 15-year fixed mortgage was unchanged at 0.8.
The average rate on the five-year adjustable loan rose to 2.93 percent from 2.90 percent. The average rate on the one-year adjustable loan also increased slightly to 2.80 percent from 2.78 percent.
The average fee on the five-year loan fell to 0.5 from 0.6 and the fee on the one-year adjustable loan was unchanged at 0.6.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
Leave a Comment:
Points: this is a sore point with me - this is a flat, open bribe to the bank - actually it is the bank demanding a bribe to give you a better rate! How many times, how many ways does the consumer get robbed by all the banking institutions?
I see how you could look at it that way, but that's sort of a cynical and unrealistic viewpoint I think. You always pay more for a better product. You can get no-point mortgages. But, if you want a "better" morgage (i.e. one with a lower rate), you pay more for it. In fact, you can get a mortgage with no points today with a rate that would have cost you at least 3 points a few years ago. If you go buy a car, you can get the stripped down version cheap, but if you want the Eddie Bauer custom trim package with heated leather seats and a 40" flat screen TV, it's gonna cost you. At least when you pay points on a mortgage to get a lower rate, if you play your cards right you get the money back in the long run.
I would like to refinance but forclosures in the neighborhood have annihilated the home values around here. Looked into HARP and people are telling me that my loan is owned by Fannie Mae which qualifies but originated with Calpers which disqualifies. I just want a better interest rate.....seems fair enough since the banks were allowed to refi all of their debt at 0.01% for free.
lol, usury
Whatever you do, dont give Quicken Loan any upfront money, you
will never see it again, especially on a refi, use your current mortgage people, that you can
trust, Quicken is a switch and bait outfit. Google them, you will see what i mean.
We'd LOVE to refinance. Too bad I recently got laid off! Make the rate as low as you want, if there's no MONEY to spend it doesn't matter.
Your information and commentary are 100% on point, and very insightful. We enjoy reading the comments and questions submitted by your readers, and the excellent answers and advice offered. Keep up the good work!
John Tebbetts
USA Home Buyer
America's Leading National Home Buyer