In another record-breaking decline, the average rate of interest on fixed-rate mortgages (174.378) by 30 years has fallen below the 5 percent mark for the first time in history, according to the mortgage finance company Freddie Mac Thursday.
The rate of 30-year FRM sank 3.94 percent, excluding taxes, during the week ending on 6 October, down from the previous all-time low 4.01 percent the week before. A year ago, the average rate was 4.27 percent.
Rates on 15-year shot hit new lows as well, sinking to 3.28% 3.26% from the previous week. A year ago was 3.72 percent. Variable rate mortgages a year brought a higher rate if you move up to 2.95% by 2.83%.
"30-year conventional fixed mortgage rates average fell below 4 percent for the first time in history this week following a sharp drop in Treasuries 10 years earlier in the week had raised concern about a global recession," said Freddie Mac vice President and Chief Economist Frank Nothaft in a press release. “…Interest rates for the weapons a year, however, rose, as the Fed began to replace 400 billion dollars of Treasury securities in the short term, that serve as benchmarks for many arms. "
He also cited recent comments by Federal Reserve Chief Ben Bernanke as adding to the pressure towards the low rate of investors. Speaking at the Congress of new Fed plan to sell short-term debt and buy longer-term bonds that Bernanke said,
"Should help a little, on growth and employment. It is particularly important that the economy is near, the recovery is faltering. "
While the rock bottom interest rates should be helpful to stimulate the housing market barely-breathing, there are a limited number of people who can benefit from them. Mortgage lending standards remain so tight that many do not qualify for home purchases and refinances. Refinancing is not even an option for most of the owners of 11 million U.S. homeowners who owe more than their homes are worth.
As Mark Goldman, a mortgage broker in Southern California who lectures at San Diego State University said the Washington Post. "It is difficult to refinance a loan these days. Only a few selected can qualify. "
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