According to a new survey by Freddie Mac, fixed mortgage rates have officially reached an all-time low with the 30-year fixed averaging 4.01% nationwide, and the 15-year-fixed mortgage ticking down to 3.28%.
The Primary Mortgage Market Survey, a weekly survey of 125 lenders conducted by Freddie Mac, says the current fixed-rate mortgages are the lowest since it began keeping records in 1971.
While data from the National Bureau of Economic Research initially pointed out that rates were lower in the early 1950s – when long-term mortgages typically lasted just 20 or 25 years – Freddie Mac explained that those rates failed to include extra fees most buyers pay.
Adjusting for the added fees, the Company said the 1950-51 average would be 4.33 percent, where as today’s average on the 30-year, with extra fees factored in, is 4.17 percent.
Despite the downward trend in fixed mortgage rates and houses being the most affordable they’ve been in decades, home sales and refinances remain stagnant.
The problem, according to Laurence Yun, chief economist of the National Association of Realtors, is that too many potential buyers are being denied loans.
Yun says strict lending standards, coupled with the fact that would-be buyers or homeowners don’t have enough cash or home equity to get a new loan, are “attenuating the housing recovery and are a risk factor for the overall economy.”
To calculate average mortgage rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
via USA Today