Mortgage Rates Fall to New Record Low: 4.27%

Mortgage Rates Fall to New Record Low: 4.27%The average 30-year fixed-rate mortgage fell to a bargain-basement 4.27% for the week ending Oct. 7, a new record low since the agency began conducting surveys in 1971, Freddie Mac announced Thursday. The average fee was 0.8 points.

That's down from the 4.32% rate last week, and significantly below the 4.87% rate that prevailed at this time last year.

"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's chief economist, in a statement. "This allowed mortgage rates to ease to new or near record lows this week."

The statistic is formulated from the national average of what banks, savings and loans, credit unions and others are charging, said Eileen Fitzpatrick, a Freddie Mac spokeswoman.

The Oct. 7 weekly rate also comes in under Freddie Mac's previous fourth-quarter forecast of a 4.5% fixed rate, she noted.

Freddie Mac expects to release its October outlook as early as Friday or early next week, said Nothaft in an interview.

"We're looking at projections for October right now and there's a good we may reduce our outlook for the fourth quarter, but I wouldn't look at a reduction to 4.0% because I think rates are as low as they can go," Nothaft said. "The quarter may stay around 4.25% to 4.3%, but not as low as 4.0%"

Meanwhile, 15-year fixed-rate mortgages fell to a new record low as well, hitting 3.72% with an average of 0.7 points. Last week, the interest rate averaged 3.75%.

Typically, when mortgage rates drop two things tend to happen: Existing home buyers tend to rush to their banks to refinance their mortgages, while folks who were considering buying a home step into the market or buy more expensive homes than they had previously planned because the decrease in interest means their monthly mortgage payment will be lower.

The National Association of Realtors said applications for home purchases have climbed more than 14% since the end of August through the week ending Oct. 1.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum

3 Comments

Filter by:
mickle.clark

Rates have definitely helped keep real estate afloat. However, the real problems are unemployment, uncertainty, confidence in the economy, and tight mortgage lending standards.

http://www.reversemortgagelendersdirect.com/reverse-mortgage-loan/
http://www.reversemortgagelendersdirect.com/reverse-mortgage-rates/
http://www.reversemortgagelendersdirect.com/reverse-mortgage-calculator/
http://www.reversemortgagelendersdirect.com/reverse-mortgage-information/
http://www.reversemortgagelendersdirect.com/reverse-mortgages-pros-and-cons/
http://www.reversemortgagelendersdirect.com/is-a-reverse-mortgage-a-good-idea/

July 23 2013 at 2:49 PM Report abuse rate up rate down Reply
asbactuary

LOL, I tried to refie my house at the new lower rate and was told to beat it. That is in light of an excellent credit rating and seven years of on time payments with exta principal. Even with the drop in prices, my house would go for over $ 200,000 with a mortgage of $ 115,000. It seems that the reason was that although the monthly payment would drop by almost 1/2, I don't make enough money to make the lower payments so will keep on making the higher ones. What a world. Who needs terrorists when we have bankers and an owned government.

October 07 2010 at 2:49 PM Report abuse rate up rate down Reply
pmurph2000

If purchasing a home, try to put at least 20% down, and expect that your new home will continue to fall in value. Do not take on more debt than is needed. A better option would be to rent a home and let someone else suffer the depreciation of the property.

October 07 2010 at 2:23 PM Report abuse rate up rate down Reply