The Truth About Mortgage.com

Mortgage rates fell this week, with the 30-year fixed slipping back to its all-time low, according to mortgage financier Freddie Mac.

The popular loan program averaged 4.78 percent for the week ending April 30, down from 4.80 percent last week and 6.06 percent a year ago.  It’s now at its lowest point since achieving the record on April 7.

The 15-year fixed remained unchanged for the third week in a row at 4.48 percent, which is also tied for a record low, and sits well below its year-ago average of 5.59 percent.

“Rates for fixed-rate mortgages hovered at record lows this week as ARM rates eased further,” said Frank Nothaft, Freddie Mac vice president and chief economist.  “Mortgage rates for 30-year fixed rate mortgages, the most popular loan among homebuyers and families seeking to refinance, are more than 1.6 percentage points below the recent peak set at the end of October 2008.”

For a $200,000 loan, that equates to savings of about $200 a month and $2,500 a year; in aggregate, borrowers who refinanced during the first quarter stand to save roughly $2.5 billion over the coming year.

The five-year ARM averaged 4.80 percent this week, down from 4.85 percent last week and 5.73 percent a year ago, also a record low.

The one-year ARM stood at 4.77 percent, down from 4.82 percent a week ago and 5.29 percent this time last year.

Once again, Nothaft took a shot at calling a housing bottom, based on some unconvincing data.

“The housing market may be edging towards a bottom,” he said.  “Existing home sales stayed near its four-month average in March while new home sales were stronger than the market consensus.  More importantly, the inventory of unsold new homes fell to the lowest number since January 2002.”

“And, the S&P/Case-Shiller® 20-city composite index did not show a record year-over-year decline in February for the first time since December 2006.  Finally, housing affordability hit record highs in the first quarter of this year, according to figures from the National Association of Realtors, which date back to January 1971.”

Unfortunately, the only homes that seem to be selling are distressed properties, affordability is high because interest rates are being manipulated by the Fed, and inventory numbers are skewed because of issues like shadow inventory, so let’s not get too excited just yet.

(photo: tambakothejaguar)