Mortgage Rates Set Record Lows Again: 30-Year at 4.32%

Low interest ratesThe 30-year fixed rate mortgage this week tied its record low first set last month, falling to 4.32 percent from last week’s 4.37 percent — while the 15-year fixed rate set its own record at 3.75 percent, down from 3.82 percent last week, Freddie Mac reported today.
This is the 21st week of the long-term mortgage rates setting new marks or staying in record territory, according to Freddie Mac’s records dating back to 1970 for the 30-year fixed.
Despite the historically low rates, applications for home purchases and refinancing have been sluggish to weak over the same period. High unemployment, stagnant or lower incomes and consumers focused on reducing debt are all factors cited by housing market analysts for the lack of mortgage activity.
The Mortgage Bankers Association yesterday said its refinance index decreased 1.6 percent last week, compared to the previous week — the fourth straight weekly decrease. Its purchase applications index increased 2.4 percent, compared to the previous week.
Also weighing heavily on the housing market is an epidemic of disappearing home equity and “underwater” homeowners who owe more than the value of their homes.
Although there have been some positive reports lately.
“Homeowners have regained $1.0 trillion in home equity as of the second quarter of 2010 after losing more than $7.5 trillion over the three-year period ending in the first quarter of 2009, the Federal Reserve Board reported,” said Frank Nothaft, vice president and chief economist, Freddie Mac.
This helped bolster household balance sheets and lower serious mortgage delinquencies. First mortgages 90-days delinquent or worse fell to 3.16 percent in August, from 4.76 percent a year prior. It was the lowest rate since June 2008, according to the S&P/Experian Consumer Credit Default Indices.
A year ago, the 30-year fixed rate mortgage averaged 4.94 percent. The 15-year fixed rate averaged 4.36 percent last year at this time.

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