Mortgage rates set ALL NEW record low
by Tim Manni
Fifty 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
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.
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.
