Mortgage Rates Still Good

National Mortgage Rates

National overnight averages Today +/-
30 yr fixed mtg 3.62%
15 yr fixed mtg 3.03%
5/1 ARM 2.78%

In another report Thursday, Freddie Mac said average rates on fixed mortgages fell again to record lows.

US Existing Home Sales Chart

The average rate on 30-year loans fell to 3.53% from 3.56% last week. It is the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, declined to 2.83%, below last week’s previous record of 2.86%.

The rate on the 30-year loan has fallen to or matched record lows in 12 of the past 13 weeks. Cheaper mortgages have contributed to the modest housing recovery. Home prices are rising in most markets. Mount Pleasant SC Builders are putting up more houses than they have in nearly four years, a long-awaited recovery that could help energize the local economy.

Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend on other things. Many homeowners use the savings on renovations, furniture, appliances and other improvements, which help drive growth.

Still, many people are having difficulty qualifying for home loans or can’t afford larger down payments required by banks. And the sluggish job market could deter some from making a purchase this year.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.

The average fee for 30-year loans was 0.7 point, unchanged from last week. The fee for 15-year loans slipped to 0.6 point, down from 0.7 the previous week.

The average rate on one-year adjustable rate mortgages was unchanged at 2.69%. The fee for one-year adjustable rate loans also stayed the same, at 0.4 point.

The average rate on five-year adjustable rate mortgages dropped to 2.69% from 2.74% last week. The fee was unchanged at 0.6 point.

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