Mortgage Rates Reach Record Low Again
Mortgage rates reached another historic low this week, as the rate on the 30 year fixed-rate fell to 4.36 percent for the first time ever. Freddie Mac, the government-controlled mortgage giant who issues a weekly report on mortgage rates, said the new record low for the 30 year represents the 9th time in the last ten weeks the rate has fallen.
The rate on a 15 year fixed rate mortgage, meanwhile, also fell to a record low of 3.86 percent, while rates on adjustable-rate mortgages, (typical ARMs have terms of 1 or 5 years) continue to sit around 3.5 percent. The weekly records for interest rates have been reported by Freddie Mac since 1990.
Insiders attribute the drop in rates to continued struggles in the real estate market, federal programs aimed at sparking demand in housing, and investors' beliefs that inflation and deflation are currently non-existent.
In related news, the Mortgage Bankers Association reported the Market Composite Index (which measure the volume of mortgage applications) for the week ending on August 20th increased just under 5 percent from a week earlier on a seasonally adjusted basis.
The volume of refinance applications for the week was up more than 25 percent from the same week in July, to a new 15 month high for the refinance index. With rates as low as they are, analysts say that even homeowners who've obtained a refinance within the last few years could seek another, causing a further surge in the refinance market.