Mortgage Rates Below 5% for 19th Week; 15-Year Sets New Low

Mortgage applicationsThe 30-year fixed mortgage rate nudged a little higher this past week to 4.37 percent, from the previous week’s 4.35 percent – but remained under 5 percent for the 19th week after setting record lows for most of the summer, according to Freddie Mac.
Last year at this time, the 30-year fixed averaged 5.04 percent. Three weeks ago, the 30–year mortgage rate set a record low of 4.32 percent, according to Freddie Mac’s records dating back to 1970.
But the 15-year fixed rate mortgage is still setting records. It hit another new low at 3.82 percent this past week, down from 3.83 percent the previous week. A year ago at this time, the 15-year fixed rate averaged 4.47 percent.
“Interest rates on 30-year fixed mortgages have remained below 5 percent for the last 19 weeks giving people ample opportunity to refinance their existing mortgage debt,” said Frank Nothaft, vice president and chief economist, Freddie Mac. “As a result, homeowners reduced their financial obligations relative to disposable personal income during the second quarter of 2010 to the lowest share in almost eight years, according to the Federal Reserve.”
Currently, four out of five mortgage applications are for refinancing existing mortgage debt, based on figures by the Mortgage Bankers Association, Nothaft said.
The MBA’s Market Composite Index, a measure of mortgage loan application volume, decreased 8.9 percent on a seasonally adjusted basis last week from one week earlier. 
The refinance portion of the MBA’s index fell 10.8 percent, reflecting a pullback in refinancing activity, but the Labor Holiday weekend contributed to some of the reduced activity.

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