Mortgage Rates Hover Above Record Lows; Refinancing Soars
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Saturday, April 18, 2009
Rates on 30-year mortgages dipped this week after rising a week earlier. They remain just above record lows.
Freddie Mac said average rates on 30-year, fixed-rate mortgages fell to 4.82 percent this week, down from an average of 4.87 percent last week. Rates have been less than 5 percent for five consecutive weeks.
The all-time low of 4.78 percent was recorded the week of April 2. Freddie Mac's survey dates to 1971.
Low rates sparked a surge in refinancing, with nearly 80 percent of new home loan applications coming from borrowers seeking to refinance. Fannie Mae refinanced $77 billion in loans last month, nearly double February's level and the best month for such activity since 2003, when the housing market was still surging.
Mortgage rates fell sharply over the winter. They fell further after the Federal Reserve said last month that it would buy $1.2 trillion in mortgage-backed securities and $300 billion in long-term government debt, which traditionally influences rates on 30-year home loans.
"The housing industry is starting to exhibit some positive signs," Frank Nothaft, Freddie Mac's chief economist, said in a statement, but he noted they were "scarce and too early to tell how permanent."
Home builders are more optimistic that the worst housing downturn in decades may be finally starting to turn around. An index of builders' confidence released Wednesday posted its biggest one-month jump in five years in April as many home buyers seized on lower prices and incentives and took advantage of lower interest rates and tax credits.
Qualifying for a loan, however, is still tough. Lenders have tightened their standards over the past year, so the best rates are available only to those with solid credit.
Freddie Mac collects mortgage rates Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.
The average rate on a 15-year, fixed-rate mortgage fell to 4.48 percent this week from 4.54 percent last week, Freddie Mac said.
Rates on five-year, adjustable-rate mortgages fell to 4.88 percent from 4.93 percent last week. Rates on one-year, adjustable-rate mortgages rose to 4.91 percent from 4.83 percent.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.6 point last week for all mortgages in Freddie Mac's survey except for one-year adjustable mortgages, which had an average fee of 0.7 point.
