Mortgage Rates Remain Near Historic Lows

By Jackson Griffin

An Associated Press article reported a Freddie Mac survey that found the 30-year fixed mortgage rate ticked up two tenths of a percent to 4 percent this week. Last week, the average rate was 3.98 percent.

Two months ago, the rate reached its historic low of 3.94 percent, according to the National Bureau of Economic Research.

The average 15-year fixed mortgage rate remained flat at 3.3 percent. It also hit a historic low two months ago, at 3.26 percent.

Only twice this year have average rates risen above 5 percent, and yet this year may be the biggest slump the home sales market in 14 years.

Mortgage rates track yields on the 10-year Treasury note. Treasury yields rise as purchasing activity falls. The yield inched up this week as investors put money into the stock market after rallying signs from the central bank’s joint effort to slacken the strict lending requirements.

Still, according to the Mortgage Bankers Association, the number of mortgage applications has been decreasing in the previous weeks.

Wages have not been rising and the unemployment rate remains high, leaving many unable to qualify for loans. Others don’t want to risk losing money on a home purchase which could stand to depreciate in the coming years. Most of those who are able to afford refinancing have already done so and have locked in rates lower than 5 percent.

Freddie Mac’s average rates exempt extra fees, or points, that the majority of borrowers are required to pay in order to receive the lowest rates. One point is equal to 1 percent of the loan amount.

The average fee for the 30-year FRM remained the same at 0.7 and the average fee for the 15-year FRM increase slightly from 0.7 to 0.8.

The average rate on the five-year adjustable loan decreased to 2.90 percent from 2.91 percent.

The average rate on the one-year adjustable loan decreased to 2.78 percent from 2.79 percent.

The averages fees for both remained the same, at 0.6.

Each week, Freddie Mac surveys lenders throughout the country between Monday and Wednesday