Market Concerns Produce New Record Low Mortgage Rates
August 11, 2011
Mortgage rates continued to decline as the 30-year fixed-rate mortgage (FRM) marked a new low for 2011, while the 1-year AMR averaged a new all-time record low.
According to Freddie Mac’s Primary Mortgage Survey, the 30-year FRM averaged 4.32 percent with an average 0.7 point for the week ending Aug. 11, down from last week when it averaged 4.39 percent. Last year at this time, the 30-year FRM averaged 4.44 percent.
"Renewed market concerns about the European debt markets led investors to shift funds into U.S. Treasuries, pushing long-term yields lower,” said Frank Nothaft, vice president and chief economist for Freddie Mac. “Further, in its August 9th Federal Open Market Committee statement, the Federal Reserve noted that economic growth so far this year had been considerably slower than it expected and that overall labor market conditions had deteriorated in recent months, leading the Committee to conclude that an exceptionally low federal funds rate should be maintained at least through mid-2013. These developments helped to ease mortgage rates lower this week.”
Meanwhile, the 15-year FRM averaged 3.50 percent with an average 0.7 point, down from last week when it also averaged 3.54 percent. A year ago at this time, the 15-year FRM averaged 3.92 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.13 percent with an average 0.5 point, down from last week when it averaged 3.18 percent. A year ago, the 5-year ARM averaged 3.56 percent.
Reaching its all-time low, the 1-year Treasury-indexed ARM averaged 2.89 percent with an average 0.5 point, down from last week when it averaged 3.02 percent. At this time last year, the 1-year ARM averaged 3.53 percent.
"Lower mortgage rates will help to maintain the high degree of home-buyer affordability in the market,” Nothaft said. “The National Association of Realtors® reported that its affordability index over the past three quarters has indicated the highest affordability since the inception of the index in 1970."