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August 22nd, 2011

Mortgage rates set ALL NEW record low

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Housing Market Trending DownFifty five years just isn’t as long as it used to be.

You would think that 55-plus year lows for mortgage rates would come around, well, every 55-plus years or so. As it turns out, that’s not exactly so; in these unusually difficult economic times, perhaps 55 years just isn’t as long as it used to be.

Mortgage rates set new ALL NEW record lows

View current mortgage rates

30-year mortgages:

HSH.com’s broad-market mortgage tracker—our weekly Fixed-Rate Mortgage Indicator (FRMI)—found that the overall average rate for 30-year fixed-rate mortgages (conforming, expanded conforming and jumbo rates) decreased by three basis points (0.03 percent), moving to an average of 4.50 percent, a new record low.

Conforming 30-year FRMs also plumbed new lows this week, beating last fall’s low water mark by a single basis points to land at 4.31 percent.

Even non-government-backed private-market jumbo mortgages are getting into the game, with 30-year FRM jumbos also in record-low territory, averaging 4.82 percent for the week ending 8/19/11.

FHA:

FHA-backed 30-year fixed-rate mortgages, especially important to first-time homebuyers and low-equity refinancers, saw a four-basis-point (0.04 percent) decline to close the week at 4.16 percent.

ARMs:

Hybrid 5/1 ARMs might interest a few borrowers with five-year fixed rate periods averaging an ultra-low 3.23 percent.

ARMs are not evil

Has it gotten any easier to get a mortgage?

Fresh record lows for mortgage rates are great, for those who can access them.

Given that the vast majority of loans are being written to Fannie Mae, Freddie Mac or FHA standards, it’s not surprising that the Federal Reserve’s latest survey of Senior Loan Officers found that underwriting standards for residential first mortgages were little changed in the second quarter of 2011.

The goalposts for obtaining credit are no longer moving—in fact, they’re even getting marginally easier–with 10 to 15 percent of banks polled reporting slightly easier standards.

Mortgage rates matter more than home prices

This goes without saying: If you can access credit to these truly record-low mortgage rates, lock in your rate immediately! Remember, in the grand scheme of things, mortgage rates matter more than home prices.

Mortgage rates: They don’t get any better

So where do we go from here?

In terms of mortgage rates, it just doesn’t get any better than this. In terms of the economy, there remains plenty of room for improvement. Of course, improvement will bring higher mortgage rates, whenever it may come.

Unfortunately, there’s not a lot of economic data due this week to break the market’s fixation on the troubles which still confront us. What is available—covering mostly July—may serve to reinforce the focus. Given the small overall decline in mortgage rates this week relative to the more pronounced decline in Treasuries, we’re expecting a pretty flat week for mortgage rates this week, barring any new panic.

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One Response to “Mortgage rates set ALL NEW record low”

  1. Getting The Most Out Of Commercial Loans | Texas Real Estate Blog Says: August 23rd, 2011 at 4:44 pm

    [...] Mortgage rates set ALL NEW record low (hsh.com) [...]

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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