Mortgage rates fell for the fourth consecutive week as poor economic news and emergency action by the Fed drove them to their lowest level in nearly four years, according to a survey by Freddie Mac.
For the week ending January 24, the 30-year fixed-rate mortgage averaged 5.48 percent, down from 5.69 percent the prior week.
At the same time last year, the 30-year averaged 6.25 percent, and has not been lower since the week ending March 25, 2004, when it averaged 5.40 percent.
“Economic news released last week confirmed the weak condition of the housing market,” Freddie Mac vice president and chief economist Frank Nothaft said in a statement.
“When the Federal Reserve cut the target federal funds rate by three quarters of a percentage point, the action was extraordinary in both the magnitude and the timing of the rate cut,” he added.
The 15-year fixed averaged 4.95 percent, down from 5.21 percent, more than a point better than its year-ago rate of 5.98 percent.
Rates on adjustable-rate mortgages also improved, with the 5-year ARM down to 5.13 percent from 5.40 percent last week, and the one-year Treasury ARM dipping to 4.99 percent from 5.26 percent.
A year ago, the five-year averaged 6.00 percent even and the one-year stood at 5.49 percent.
The question remains whether most homeowners will be able to take advantage of these low rates considering the current state of affairs.
Many of those in greatest need of a refinance may not have the required equity in their homes, while those with blemished credit or limited documentation could be left out thanks to tighter underwriting guidelines.
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