Fixed-Rate Mortgages Hit New All-Time Lows: 30-Year at 3.40%

Fixed mortgage rates set new all-time lows this week, bolstering an improving housing market and helping fuel a resurgence in refinancing.
All loan products set new lows, except the 5-year adjustable-rate mortgage, according to Freddie Mac.
The 30-year fixed rate hit 3.40 percent, after matching the previous record of 3.49 percent last week.
The 15-year fixed rate, a popular option for refinancing borrowers, declined to 2.73 percent this week, from 2.77 percent last week.
Mortgage rates resumed a more robust downward trend following the Federal Reserve’s announcement this month that it would initiate an open-ended, monthly purchase of $40 billion in mortgage-backed securities.
The central bank’s goal is to lower or keep mortgage rates low enough to give the housing recovery a jolt. Fed Chairman Ben Bernanke also said the bond-buying program will continue until there is improvement in the job market.
“Fixed mortgage rates continued to decline this week, largely due to the Federal Reserve’s purchases of mortgage securities, and should support an already improving housing market,” said Frank Nothaft, vice president and chief economist, Freddie Mac.
There has been a flurry of positive housing-market reports in recent days. This week, the S&P/Case-Shiller 20-city index measuring home prices rose 1.2 percent over the 12 months ending in July, reflecting the largest annual increase since August 2010.
Sixteen of the cities saw positive growth, led by Phoenix’s 16.6 percent increase. Additionally, new home sales in July and August had the strongest two-month pace since March and April 2010.
Here is Freddie Mac’s overview of mortgage rates:
30-year fixed-rate averaged 3.40 percent, with an average 0.6 point, for the week ending September 27, 2012, down from last week when it averaged 3.49 percent. Last year at this time, the 30-year FRM averaged 4.01 percent.
15-year fixed-rate averaged 2.73 percent, with an average 0.6 point, down from last week when it averaged 2.77 percent. A year ago at this time, the 15-year FRM averaged 3.28 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.71 percent, with an average 0.6 point, down from last week when it averaged 2.76 percent. A year ago, the 5-year ARM averaged 3.02 percent.
1-year Treasury-indexed ARM averaged 2.60 percent, with an average 0.4 point, down from last week when it averaged 2.61 percent. last week. At this time last year, the 1-year ARM averaged 2.83 percent.

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