Freddie Mac: 30-Year Mortgage Rates Drop To 3.78%
Freddie Mac released its newest survey on Thursday which showed 30-year fixed-rate mortgages slipping from 3.79% to 3.78%
The survey also revealed that new home sales have been on the rise as low rates make those purchases more affordable for millions of homebuyers.
The biggest concern still remains the millions of homeowners who are unable to sell their homes because they are worth less than their mortgages. The devaluation of homes caused home resales to plummet, leading to a hardship on the recovery process.
Following the Freddie Mac survey the Mortgage Bankers Assn. on Thursday increased its mortgage origination forecast to $200 billion for 2012.
If predictions are correct $1.28 trillion in mortgages will be written in 2012, up slighty from $1.26 trillion in 2011. Because of the aforementioned home valuation problem however refinancing is expected to remain at 2011 numbers which totals approximately $870 billion.
The Freddie Mac survey also found that one-year adjustable-rate loans are now averaging 2.75% down from 2.78% the previous week while “hybrid” loans that become adjustable after five years at a fixed rate remained unchanged at 2.83%.
The survey notes that borrowers have the option to “buy down” mortgage rates by paying additional discount points to lenders at the time of closing, the survey did not include those buyers and it did not reflect additional closing costs associated with special circumstances brought on by those buyers.
Rates continue to remain low but until the US government, mortgage lenders and other lending institutions find a way to offload homes valued at less than their mortgage costs it’s likely to be a bumpy road well into the future.
