As reported in the OC Register, 8/26/10

Interest rates for a home loan fell again this past week, the 10th straight week that mortgage rates were at or below record levels, according to the latest Freddie Mac survey.

This weeks average rates were:

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  • Thirty-year fixed-rate loans: 4.36% with 0.7 of a point paid up front. That’s the lowest in records dating back to 1971. Rates began their dive into record territory on June 24. They set new lows in nine of the past 10 weeks. NOTE: The average 30-year rate since 1971 is 8.94%.
  • Fifteen-year fixed rate loans: 3.86% with 0.6 of a point paid up front. That’s the lowest in records dating back to 1991.
  • Five-year adjustable-rate loans (ARM): 3.56% with 0.6 of a point paid up front. This rate was unchanged from last week and is tied with the previous low in records dating back to 2005.
  • One-year ARM’s: 3.52% with 0.7 of a point paid up front. This rate is down from last week, still above rates in 2003 and 2004. The low in records dating back to 1984 was 3.36%, with 0.6 of a point, set in the week ending on March 25, 2004.

The Associated Press:

“Mortgage rates fell to the lowest level in decades for the ninth time in 10 weeks, as concerns grow that the economy is weakening.

“… Rates have fallen since spring as investors shifted money into the safety of Treasury bonds, lowering their yield. Mortgage rates tend to track those yields.

“The low rates have fueled borrowers to refinance their home loans. Refinancing is at its highest level since May 2009 and made up 82.4 percent of all new loan activity.

“However, low rates haven’t budged home sales, Those have been stymied by high unemployment, slow job growth and strict credit standards, and have dropped sharply since the expiration of home-buying tax credits in April.”

Bloomberg News:

“Mortgage rates have set or met a record for 10 straight weeks as concern of a faltering economic recovery spurred demand for bonds including those backed by home loans. Low borrowing costs have yet to spur home sales, which are being depressed by unemployment and the end of a federal homebuyer tax credit.

” ‘In terms of affordability, the mortgage market is going to be good for the housing market,’ Paul Dales, U.S. economist for Capital Economics in Toronto, said before the report. ‘But there are other factors, namely just the poor economic conditions. All is very well if mortgage payments are low, but if you don’t have a job, it doesn’t make a difference.’

“Sales of new homes fell 12 percent in July from the previous month to the lowest annual pace since data dating to 1963, the Commerce Department said yesterday. Existing-home sales plunged 27 percent last month to the slowest annual pace since comparable records began in 1999, according to the National Association of Realtors.

“U.S. unemployment is near a 26-year high at 9.5 percent. Applications for unemployment benefits dropped by 31,000 — the first decline in a month — to 473,000 in the week ended Aug. 21, Labor Department figures showed today.”

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