Mortgage Rates Reach All-Time Lows

Mortgage rates have hit an all-time low according to Freddie Mac's Primary Mortgage Market Survey. 30-year fixed-rate mortgages averaged 4.15% last week. 15-year fixed-rate mortgages averaged 3.36%.

The drop has done little to help new home sales, but it did cause a surge in refinancings. Frank Nothaft, the vice president and chief economist of Freddie Mac, said "Not surprising, many homeowners took advantage of this low mortgage rate environment and have already refinanced their loans. The refinance share of applications averaged nearly 70 percent of all mortgage activity in the first half of this year, according to our survey. In addition, an increasing share of refinancing borrowers chose to shorten their loan terms during the second quarter."

One of the primary reasons for the drop is that mortgage rates are tied to government debt. The 10-year Treasury hit an all-time low of 1.99% Thursday. The previous record was 2.03%.

No matter how attractive mortgage rates are, they have not caused an increase in homes sales, and are not likely to. Many banks now require at 20% down payment for home loans due to fear that house prices are still falling and the the creditworthiness of many Americans is weak.

And, home prices have continued to drop rapidly. S&P Case-Shiller data show that the prices of homes in the the 10 largest and 20 largest cities are still falling. RealtyTrac reports foreclosures are down, but expects them to accelerate after lawsuits over robo-signing activity clear the courts. Banks still hold "shadow inventory" of homes upon which they have foreclosed but have not put back onto the market. This pool is estimated at as large as 3 million houses. That inventory will probably drive prices down
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further in the markets in which they are concentrated. And, of course, the unemployment rate is still above 9% and the total of unemployment and "under-employment" is nearly 17%.

Mortgages rates may be down, and may even fall further. That will not help the housing market one iota, at least for the time being.

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Johnson Smith

This is all the effect of the debt crisis which has shaken the whole world and the whole economy

August 22 2011 at 8:57 AM Report abuse rate up rate down Reply

After what seemed like a lifetime of thirty-Year adjustable-rate mortgages, with monthly mortgage payments going up all the time, The "123 Refinance" helped me to lock in a great low fixed rate of 3.16%, helping me to guarantee myself the ability to always make my mortgage payment on time with money to spare.

August 22 2011 at 6:31 AM Report abuse rate up rate down Reply

Since Obama has been endorsed by the Communist Party, his bums.........I mean followers should be known as Obamunists.

August 21 2011 at 10:46 PM Report abuse rate up rate down Reply

ive been trying to modify my mortgage with bank of america since february of 2009
2 years later my house is in forcloser i still cant get an answer from bank of america
i was told theres no goverment programs to help me now they are trying through fannie mae
i was told my application is now in their under writting department .
please pray for me and my family, god bless.

August 20 2011 at 11:20 PM Report abuse rate up rate down Reply

Get real! IF you lost your job in the Big D-Recession and stayed unemployed for any length of time your credit probably took a hit. SO even if you did get a new job, your struggling to get back on your feet. Plus you probably took a cut in pay. Also...if you managed to keep your credit in tact you most likely used your savings and 401K to stay afloat. Mortgage rates can be 2% and a vast number of people can't buy a home.

August 20 2011 at 2:26 PM Report abuse +3 rate up rate down Reply

The Communist party has endorsed Obama for a second term. Are you surprised? Most of his followers are Communists.

August 20 2011 at 10:39 AM Report abuse +4 rate up rate down Reply
1 reply to savemycountry911's comment


August 21 2011 at 4:58 PM Report abuse -1 rate up rate down Reply

We did just that - cashed out the 529's. Refied to a lower, fixed rate to get out of an ARM check out "123 Refinance" to find lower rates with out entering your SSN!

August 20 2011 at 5:01 AM Report abuse -2 rate up rate down Reply
1 reply to antoniocadena88's comment

I think you lie like a rug.

August 20 2011 at 9:08 AM Report abuse +1 rate up rate down Reply

What do you expect when more people are living on tax money than are paying taxes? Consider, politicians and all the over paid, under qualified and over staffed bureaucrats are living on our taxes too.

August 20 2011 at 4:55 AM Report abuse +3 rate up rate down Reply

in 30 years, I have never been turned down for any kind of loan ever. I have had about15-18 mortgages in that time (I own rentals), never a problem. 800 FICO, no cc debt, no car loans, I have never been unemployed, always paid everything on time and they look at me as high risk because I have 4 mortgages on 9 rental properties (5 are free and clear). Never vacant, huge positive cash flows, etc. The idiot banks did not understand real estate and risk 5 years ago, and they still don't.

August 19 2011 at 10:35 PM Report abuse +9 rate up rate down Reply

Remember when Dems screamed that President Bush was in bed with big oil. I guess Obama has taken to that bed as well.

August 19 2011 at 10:12 PM Report abuse rate up rate down Reply