For two weeks now mortgage rates have been imitating Alicia Keys’ biggest hit. No, they’re not a Girl on Fire, They’re Fallin’. Although mortgage rates haven’t been falling in and out of love with you, they have reduced their numbers significantly in the past two weeks. This is due mostly to the Federal Reserve’s decision not to taper bond purchases, and if you’re looking to refinance or purchase a home, your opportunity hasn’t looked better in months. Nine weeks to be exact; the Primary Mortgage Market Survey showed the 30-year fixed rate fall to its lowest level since July 25 of this year. Let’s take a look at the raw numbers, shall we?
30-year fixed-rate mortgage (FRM) averaged 4.32% with an average 0.7 point for the week ending September 26, 2013, down from last week when it averaged 4.50%. A year ago at this time, the 30-year FRM averaged 3.40%.
15-year FRM this week averaged 3.37% with an average 0.7 point, down from last week when it averaged 3.54%. A year ago at this time, the 15-year FRM averaged 2.73%.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.07% this week with an average 0.5 point, down from last week when it averaged 3.11%. A year ago, the 5-year ARM averaged 2.71%.
1-year Treasury-indexed ARM averaged 2.63% this week with an average 0.4 point, down from last week when it averaged 2.65%. At this time last year, the 1-year ARM averaged 2.60%.
Some people want it all, but I don’t want nothing at all if I ain’t got low rates. Rumor has it that was the original lyrics in Ms. Keys’ “If I Ain’t Got You,” at least that’s what’s said around home loan circles. But if you’re looking for factual information, let’s take a look at this quote from Frank Nothaft, vice president and chief economist of Freddie Mac.
“Mortgage rates fell following the Federal Reserve announcement that it will maintain its bond buying stimulus. These low rates should somewhat offset the house price gains seen the last number of months and keep housing affordability elevated. For instance, the S&P/Case-Shiller® 20-city composite house price index rose 12.4% over the 12-months ending in July, which represented the largest annual increase since February 2006. In addition, more than half of the cities had annual growth exceeding 10% and four cities saw increases exceeding 20%.
“These increases in home values have also increased homeowner wealth. For example, homeowners experienced an aggregate $1.4 trillion increase in equity in their homes over the first half of this year which contributed to the overall $4.2 trillion gain in household net worth.”