Rate on 30-Year Fixed Mortgage Falls to 4.11 Percent

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WASHINGTON -The average rate on the 30-year fixed mortgage was nearly unchanged this week after rising sharply last week.

Freddie Mac said Thursday that the rate on the 30-year loan edged down to 4.11 percent from 4.12 percent last week. The week before, it fell to 3.94 percent. That's the lowest rate ever, according to the National Bureau of Economic Research.

The average rate on the 15-year fixed mortgage ticked up to 3.38 percent from 3.37 percent. It hit a record-low of 3.26 percent two weeks ago.

Low rates have done little to revive the lagging housing market, which has struggled with weak sales and declining prices. Many can't qualify for loans because their credit is weak or they can't afford a down-payment. Most of those who can afford to refinance already have.

The number of Americans who bought previously occupied homes fell in September and is on pace to match last year's dismal figures - the worst in 13 years.

The National Association of Realtors said Thursday that home sales fell 3 percent last month to a seasonally adjusted annual rate of 4.91 million homes. That's below the 6 million that economists say is consistent with a healthy housing market.

Sales of new homes are on pace to finish the year as the lowest on records dating back a half-century. Prices have been sliding because the market is flooded with houses being sold in foreclosure.

Many borrowers are unable to take advantage of the low rates because they can't meet banks' restrictive lending standards, or are unable to scrape together a down payment.

The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.

There have been a few modest signs of life for housing. Homebuilders started projects in September at the fastest pace in 17 months, the government said Wednesday. Most of the gain was driven by a surge in volatile apartment construction.

Still, single-family home construction, which represents nearly 70 percent of the market, increased only slightly. And building permits, a gauge of future construction, fell.

See full article from DailyFinance: http://srph.it/lzQzUL

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thegucaptain

Is it really restrictive lending standards or ( normal lending standards ) And is it really foreclosures that are pulling prices down or ( true affordability ) Gald I dont have to hear ( you cant lose money in real-estate) anymore!

October 20 2011 at 7:49 PM Report abuse +1 rate up rate down Reply
thegucaptain

Is it really restrictive lending standards or ( normal lending standards ) And is it really foreclosures that are pulling prices down or ( true affordability )

October 20 2011 at 7:41 PM Report abuse +1 rate up rate down Reply
kellyzblake1970

How do the banks make any money with rates that low?

October 20 2011 at 3:19 PM Report abuse rate up rate down Reply
2 replies to kellyzblake1970's comment
Greg

@kellyzblake1970, they can't. But that's okay, cause it's a bait and switch program. 99% of would-be borrowers will never qualify at such low rates. Banks say things like, "you don't qualify for that rate, but we can get you this wonderful 30 year fixed at 7.99% if you sign today."

October 20 2011 at 3:42 PM Report abuse +1 rate up rate down Reply
evd10

Greg is right. A lot of people will not qualify for those rates. The ones who do will have to have 20% or more down plus closing costs, exemplary credit and long-term steady, provable income. For those who do qualify the bank makes some money on closing costs. They are also able to now borrow from the Treasury at near 0%. In addition, most mortgages are paid long before the term of the mortgage is up. I once read that the average mortgage is retired in 7 years. The banks also like to court the kind people who do qualify as customers.

October 20 2011 at 4:59 PM Report abuse +1 rate up rate down Reply
nnanciejean

At least we were able to get a low interest rate for our second home. Without the dem caused housing crisis I never would have been able to afford a retirement home so early.

October 20 2011 at 1:22 PM Report abuse +1 rate up rate down Reply
scottee

with The Fed holding interest rates down artificially....how are you enjoying the interest rate on your savings account?

October 20 2011 at 11:56 AM Report abuse +5 rate up rate down Reply