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Record Low Mortgage Rates Helping To Stir The Housing Market

Written by on Thursday, 19 July 2012 7:00 pm

In Freddie Mac's results of its Primary Mortgage Market Survey®, the average 30-year and 15-year fixed-rate mortgage hitting new all-time record lows along with the 5-year ARM. The average 30-year fixed has been below 4.00 percent all but one week in 2012. The average 15-year fixed-rate mortgage has been below 3.00 percent for 8 consecutive weeks.

Freddie Mac's Chief Economist highlights how these record low mortgage rates are fueling housing demand in its July U.S. Economic and Housing Market Outlook.

  • 30-year fixed-rate mortgage (FRM) averaged 3.53 percent with an average 0.7 point for the week ending July 19, 2012, down from last week when it averaged 3.56 percent. Last year at this time, the 30-year FRM averaged 4.52 percent. 

  • 15-year FRM this week averaged 2.83 percent with an average 0.6 point, down from last week when it averaged 2.86 percent. A year ago at this time, the 15-year FRM averaged 3.66 percent. 

  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.69 percent this week, with an average 0.6 point, down from last week when it averaged 2.74 percent. A year ago, the 5-year ARM averaged 3.27 percent.

  • 1-year Treasury-indexed ARM averaged 2.69 percent this week with an average 0.4 point, the same as last week. At this time last year, the 1-year ARM averaged 2.97 percent.  

    According to to Frank Nothaft, vice president and chief economist, Freddie Mac:

    "With little signs of inflation and the Federal Reserve's "Operation Twist" keeping U.S. Treasury bond yields in check, fixed mortgage rates are remaining low and helping to stir the housing market. For instance, the 12-month growth rate in the core Consumer Price Index has been in a narrow 2.1 to 2.3 percent band over the past nine months ending in June. Meanwhile, new construction on one-family homes rose for the fourth consecutive month in June to its strongest pace since April 2010 with builders restocking their lean inventories of new homes.  In fact, homebuilder confidence for the next six months rose for the third month in a row in July to its highest reading since March 2007."

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