Fixed Mortgage Rates Sink to Lowest on Record (9/29/2011)
Fixed mortgage rates fell to all-time record lows this week following the Federal Reserve’s announcement of “Operation Twist.”
The central bank’s new stimulus policy entails reinvesting principal payments from its holdings of GSE debt and mortgage-backed securities back into new mortgage bonds issued by Fannie Mae and Freddie Mac. The Fed also intends to purchase $400 billion more of Treasury securities by the end of June 2012.
Data released by Freddie Mac Thursday puts the average 30-year fixed-rate mortgage at 4.01 percent (0.7 point)
for the week ending September 29. That’s down from 4.09 percent last week. A year ago at this time, the 30-year rate averaged 4.32 percent.
Of the five regions surveyed in Freddie Mac’s survey, the West region recorded the lowest average rate for the 30-year fixed dipping below the 4 percent to 3.95 percent this week.
The 15-year fixed-rate averaged 3.28 percent (0.7 point) this week in the GSE’s survey, down from last week’s average of 3.29 percent. A year ago at this time, the 15-year rate was 3.75 percent.
Both the 30-year and 15-year fixed rates averaged an all-time record low in Freddie Mac’s study. Interest rates for adjustable-rate mortgages (ARMs), on the other hand, were virtually unchanged.
The 5-year ARM averaged 3.02 percent (0.6 point) this week, matching last week’s average. A year ago, the 5-year ARM was 3.52 percent.
The 1-year ARM came in at 2.83 percent (0.6 point), up one basis point from 2.82 percent last week. At this time last year, the 1-year ARM averaged 3.48 percent.
Freddie Mac’s survey averages mortgage rates from 125 lenders across the country.