Will Mortgage Rates Test All-Time Lows in 2015? Good Start: 30-Year Fixed at 3.73%

The new year, so far, is treating borrowers very well, with the 30-year fixed mortgage rate sliding further to 3.73 percent, territory not seen seen since 2012 and 2013, according to Freddie Mac.

That’s the lowest mark for the 30-year loan since May 23, 2013.
This past week’s mortgage rates were influenced by sliding bond yields that fell to their lowest level since May 23, 2013, when the 30-year fixed averaged 3.59 percent. Falling oil prices and worries about the weakening euro have driven investors to the safety of the U.S. government bonds, which provide a guide for borrowing costs.
While the employment picture continues to improve, are there sufficient market and economic factors that could push the benchmark mortgage rate close to its all-time low? Quite possibly, as Federal Reserve policymakers continue to hold the line on raising the central bank’s key rate, which has stayed at “near zero” since late 2008.
The 30-year fixed rate set its all-time low in November 2012: 3.31 percent. That was the best year for purchasing a home if you had good credit and managed to ride out the financial crisis and Great Recession in relatively good shape.  The 30-year fixed-rate mortgage averaged 3.66 percent for 2012, the lowest annual average in at least 65 years.
But 2014 saw a jump in rates above 4 percent. The 30-year fixed-rate average for 2014 was 4.17 percent, the highest annual average since 2011.
For now, the trend has reversed again to a downward track, potentially opening doors for first-time homebuyers and those prospective buyers who had been sitting on the sidelines as home prices have risen beyond their grasp.
Here is Freddie Mac’s most recent overview of mortgage rates:
30-year fixed-rate mortgage (FRM) averaged 3.73 percent, with an average 0.6 point for the week ending January 8, 2014, down from last week when it averaged 3.87 percent. A year ago at this time, the 30-year FRM averaged 4.51 percent.
15-year FRM this week averaged 3.05 percent, with an average 0.5 point, down from last week when it averaged 3.15 percent. A year ago at this time, the 15-year FRM averaged 3.56 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.98 percent this week, with an average 0.5 point, down from last week when it averaged 3.01 percent. A year ago, the 5-year ARM averaged 3.15 percent.
1-year Treasury-indexed ARM averaged 2.39 percent this week with an average 0.4 point, down from last week when it averaged 2.40 percent. At this time last year, the 1-year ARM averaged 2.56 percent.

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