Fixed-Rate Mortgages Continue To Find New Record Lows

September 15, 2011

Fixed-rate mortgages remained near their 60-year lows as ongoing investor concerns over the European debt market kept Treasury bond yields low.

According to Freddie Mac’s Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 4.09 percent, a new all-time low. The 15-year fixed, a popular refinancing option, also reached a new record low for the week averaging 3.30 percent.

Last week, the 30-year FRM averaged 4.12 percent. Last year at this time, the 30-year FRM averaged 4.37 percent. Meanwhile, the 15-year FRM averaged 3.33 percent last week. A year ago at this time, the 15-year FRM averaged 3.82 percent.

"Continued investor concerns over the state of the European debt markets kept U.S. Treasury bond yields low and allowed mortgage rates to ease once more this week,” said Frank Nothaft, vice president and chief economist for Freddie Mac. “In comparison, the average interest rate of mortgages outstanding in the second quarter was 5.28 percent. By refinancing into today's 30-year fixed mortgage, homeowners could shave almost $1,715 a year in interest payments on a $200,000 loan.”

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.99 percent this week, with an average 0.6 point, up from last week when it averaged 2.96 percent. A year ago, the 5-year ARM averaged 3.55 percent.

The 1-year Treasury-indexed ARM averaged 2.81 percent this week with an average 0.6 point, down from last week when it averaged 2.84 percent. At this time last year, the 1-year ARM averaged 3.40 percent.

"Apart from just fixed-rate mortgages, various other interest rates are at or near all-time historical lows as well,” Nothaft said. “Both the 10-year constant-maturity Treasury bond and AAA-rated seasoned corporate bond yields were at 50-year lows over the week ending September 9th. In addition, the 1-year constant-maturity bill, a popular index for ARMs, hit its nadir over the week of September 2nd since data began in 1952."

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