30-Year Fixed Rate Back Under 4% as Mortgage Apps Zoom

Average fixed mortgage rates remained near record lows in the past week, keeping housing affordability high for those borrowers who are fortunate enough to be in the market in the midst of a tough economy.
The 30-year fixed dipped to 3.99 percent, down from last week when it averaged 4.00 percent, according to Freddie Mac’s latest report. The all-time low of 3.94 percent for the 30-year fixed was set in October.
At 3.27 percent, the 15-year fixed averaged was just slightly above its all-time low of 3.26 percent that was also set in October. It averaged 3.30 percent last week.
The consistently low rates helped boost the Mortgage Bankers Association’s composite index that measures mortgage applications by 12.8 percent last week, compared to the previous week. The percentage change is seasonally adjusted.
“Coming out of the Thanksgiving holiday, applications increased significantly as mortgage rates dropped to their lowest levels in about two months,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “In particular, refinance applications increased sharply, with some lenders seeing refinance volume double. Despite this surge, aggregate refinance activity is still below levels reported two weeks ago.”
According to Freddie Mac’s update on mortgage rates, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.93 percent this week, with an average 0.5 point, up from last week when it averaged 2.90 percent. A year ago, the 5-year ARM averaged 3.60 percent.
The 1-year Treasury-indexed ARM averaged 2.80 percent this week, with an average 0.6 point, up from last week when it averaged 2.78 percent. At this time last year, the 1-year ARM averaged 3.27 percent.
“Thirty-year fixed-rate loans have declined 0.62 percentage points from a year ago, and median sales prices on existing homes are off 4.7 percent in the year ending with October,” said Frank Nothaft, vice president and chief economist, Freddie Mac. “These low rates and home prices have pushed housing affordability to record highs this year.”
The National Housing Affordability Index, which dates back to 1971, reached another all-time record high in October for the sixth time in 2011, reported the National Association of Realtors. Monthly principal and mortgage interest payments accounted for just 12.6 percent of median family incomes that month.

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