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Home Affordability Pushed Higher as Rates Fall

Monday, June 4, 2012   /   by Carlos J Higareda

Home Affordability Pushed Higher as Rates Fall

Mortgage rates are at historic low prices and the savings are huge. Now is the time to buy a home!


 





For the fifth week, fixed-rate mortgages reached new all-time lows. The 15-year fixed-rate mortgage dipped below 3 percent, settling into uncharted territory, according to Freddie Mac’s weekly mortgage market survey. Thirty-year fixed-rate mortgages also reached new record lows, continuing to stay under 4 percent and pushing home buyer affordability even higher.


“Compared to a year ago, rates on 30-year fixed mortgage rates are almost 0.9 percentage points lower, which translates into nearly $1,200 less in annual payments on a $200,000 loan,” says Frank Nothaft, Freddie Mac’s chief economist.


Here’s a closer look at rates for the week ending May 31.



  • 30-year fixed-rate mortgages: averaged 3.75 percent, with an average 0.8 point, dropping from last week’s previous all-time low of 3.78 percent. A year ago, 30-year rates averaged 4.55 percent.

  • 15-year fixed-rate mortgages: averaged 2.97 percent, with an average 0.7 point, dropping from last week’s previous record low of 3.04 percent. Last year at this time, 15-year rates averaged 3.74 percent.

  • 5-year adjustable-rate mortgages: averaged 2.84 percent, with an average 0.6 point, rising slightly from last week’s 2.83 percent average. A year ago at this time, 5-year ARMs averaged 3.41 percent.

  • 1-year ARMs: averaged 2.75 percent, with an average 0.4 point, holding steady at last week’s average. A year ago, 1-year ARMs averaged 3.13 percent.


Source: Freddie Mac




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Carlos Higareda
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