Mortgage giant Freddie Mac’s weekly rate survey shows interest rates back at historic lows, but some observers guessed these deals may not last.
Freddie Mac found …
- Average rates for 30-year fixed loans at 4.17 percent — down from 4.24 percent last week and lowest in their records that go back to 1971.
- Average 15-year fixed rate was 3.57 percent vs. 3.63 percent previously. This is also the lowest since Freddie Mac started tracking these loans in 1991.
- Also, 5-year hybrid adjustable-rate mortgages averaged 3.25 percent vs. 3.39 percent and 1-year Treasury-indexed ARMs were 3.26 percent, flat for the week.
Online loan tracker LendingTree’s latest weekly report showed as of Tuesday its lowest rates from its network of lenders: 3.75 percent (3.94% APR) for a 30-year fixed; 3.25 percent (3.49% APR) for 15-year fixed; and 2.625 percent (3.13% APR) for 5/1 ARM.
If you recall, the Federal Reserve last week said it would buy $600 billion in government bonds as a way to help keep interest rates — like mortgages — low. Says Cameron Findlay, LendingTree chief economist: “As expected, the Federal Reserve’s decision to pursue quantitative easing has driven mortgage rates down this week.”
Looking forward, Bankrate’s weekly Rate Trend Index, surveying mortgage experts on where rates are headed in next seven days, found half of the panel expecting a rise; 29 percent predicted another fall; and 21 percent expect more or less unchanged.
And does the cheap money make a difference to housing? Freddie Mac Chief Economist Frank Nothaft: “Despite historically low mortgage rates, however, the housing recovery continues to be slow owing in part to household job uncertainty and tight credit conditions.”