Fixed Mortgage Rates Hit Historic Lows

Record Breaking Interest Rate
Freddie Mac reported that fixed-rate mortgage loans hit record lows for the week ending on May 3, 2012. With the 30-year rate averaging at 3.84 percent, and the 15-year rate averaging at 3.07, these are the lowest reported averages for fixed-rate mortgages in history.

“Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week,” said Frank Nothaft, vice president and chief economist at Freddie Mac, in a press release.

Low interest mortgage loans have been a key selling point for real estate agents and brokers looking to scrounge up business in our depressed economy. To put into perspective just how low these historic rates are, last year at this same time, the average 30-year rate was 4.71 percent while the average 15-year rate was 3.89 percent.

In addition to the fixed-mortgage rates hitting record lows, the 1-year adjustable rate mortgage (ARM) also averaged at a new historic low. Boasting a strong 2.70 percent, investors interested in ARMs are facing an extremely rare and profitable opportunity as borrowing money at less than 3 percent is nearly unheard of.

Last year, the 1-year ARM averaged at 3.14 percent.

The only rate that Freddie Mac reported didn’t break a historic record was the 5-year ARM. Last week the 5-year ARM sat at 2.85 percent, and this week it remains unchanged. Last year, however, it was over half-a-percent higher, averaging at 3.45 percent.

Freddie Mac acts under the direction of the Federal Housing Finance Agency (FHFA) and currently secures mortgage loans across the nation. While operating in the secondary mortgage market, Freddie Mac also participates in cost-reducing programs as it continues to support the nation’s recovery.