Mortgage Rates Fall to New Lows: 30-year at 4.27%; 15-year at 3.75%

Mortgage ratesLong-term mortgage rates have entered their fifth month of record lows, with the 30-year-fixed rate averaging 4.27 percent and the 15-year fixed rate at 3.72 percent – both new lows, according to Freddie Mac’s report for this week.
The 30-year fixed rate fell from 4.32 percent last week. It averaged 4.87 percent a year ago. The 15-year fixed rate dropped from 3.75 percent last week. A year ago, it was at 4.33 percent.
Freddie Mac has been tracking the most popular mortgage rate – the 30-year-fixed – since 1970.
“The 12-month growth rate in the core price index for personal consumption, which the Federal Reserve closely tracks, has been drifting lower over the past six months ending in August and suggests inflation is running at a tepid pace at best,” said Frank Nothaft, Freddie Mac vice president and chief economist. “This allowed mortgage rates to ease to new or near record lows this week.”
Despite record lows, home buyers – and even those refinancing mortgages – are for the most part staying out of the market, a result of a sluggish economic recovery, high unemployment and a grower number of homes in negative equity, according to housing market analysts.
For the week ending Oct. 1, there was a glimmer of hope in figures released by the Mortgage Bankers Association, which showed a 9 percent increase in its index that measures applications for the purchase of a home.
It was the biggest jump in the MBA’s purchase index since the expiration of homebuyer tax credits in the spring, which caused home purchase activity to dramatically decrease over the summer.
The increase in purchase activity for the week ending Oct. 1 was led by a 17.2 percent increase in Federal Housing Administration applications, while conventional purchase applications increased by 3.6 percent, said Jay Brinkmann, MBA’s chief economist.
“One possible driver of last week’s big increase in FHA applications was a desire by borrowers to get applications in before new FHA requirements took effect October 4th, which included somewhat higher credit score and down payment requirements,” Brinkmann said.
The MBA’s refinance activity index decreased by 2.5 percent for the same period, compared to the previous week.

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