Fixed Mortgage Rates Fall to New Record Lows

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mortgage ratesWASHINGTON -- The average rate on the 30-year fixed mortgage fell to a record 3.91 percent this week, the third time this year that rates have hit new lows.

Freddie Mac said Thursday that the average on the 30-year home loan fell from 3.94 percent the previous week. The 3.91 percent rate is the lowest average for long-term fixed mortgages on records dating to the 1950s

The average on the 15-year fixed mortgage was unchanged this week at 3.21 percent. That's also a record.

Low rates offer a historic opportunity for those who can afford to buy a home or refinance. But many Americans either can't take advantage of the rates or have already done so.

Rates have been below 5 percent for all but two weeks in 2011. Even so, this year is shaping up to be one of the worst ever for home sales.

Rates could fall further still. Many economists think the yield on the 10-year Treasury note could creep lower in 2012. Long-term mortgage rates tend to track the 10-year Treasury yield.

Should the Federal Reserve launch a new program of bond purchases in the coming months to try to help the economy, it could further drive down mortgage rates.

Frank Nothaft, Freddie Mac's chief economist, has said that despite the super-low loan rates, foreclosures and falling home values have created obstacles for would-be buyers.

But builders could see more interest from buyers in the coming months if mortgage rates stay low. The low rates contributed to a modest 2-point increase in builder sentiment in the latest National Association of Home Builders survey released this month, said Yelena Shulyatyeva, an analyst at BNP Paribas. Those rates, coupled with falling prices, could draw more people into the market, she said.

Sales of previously occupied homes are just slightly ahead of last year's dismal sales figures. New-home sales appear headed for their worst year on records going back half a century.

Mortgage applications fell about 2.6 percent last week, according to the Mortgage Bankers Association. Refinancing fell 1.6 percent. And loan applications to buy homes fell nearly 5 percent. Over the past four weeks, the level of mortgage applications has been relatively unchanged.

Some lenders have reported an increase in applications through the Obama administration's refinancing program. That program was broadened in October to allow up to 1 million more homeowners lower their mortgage payments. But the MBA said such government-assisted loans account for just a small portion of refinancing.

High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many Americans don't want to sink money into a home that they fear could lose value over the next few years.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week. The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for the 30-year loan fell to 0.7 from 0.8; the average on the 15-year fixed mortgage was unchanged at 0.8.

For the five-year adjustable loan, the average rate fell to 2.85 percent from 2.86 percent. The average on the one-year adjustable loan declined to 2.77 percent from 2.81 percent.

The average fees on the five- and one-year adjustable-rate loans were unchanged at 0.6.

Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.Also see:
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Fixed Mortgage Rates Fall to New Record Lows


FHA Conforming Loan Limit: $729,750

Price: $729,000
Beds/Baths: 3/2
Sq. Ft.: 1,250

As you might expect in the country's most expensive city, New York residential real estate has the highest conforming loan limit allowed under law, $729,750. While in the chicer parts of Manhattan that'll get you beans, if you're willing to live a little south of the action, you can snatch up an apartment like this three-bedroom -- for only 3.5 percent down. 

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That's ample space for a New York apartment. And with its gleaming hardwood floors and spic-and-span kitchen, this downtown dwelling strikes us as a pretty good deal. 

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FHA Conforming Loan Limit: $729,750

Price: $729,000
Beds/Baths: 2/2
Sq. Ft.: N/A

The country's second biggest -- and notoriously traffic-plagued -- city is also just about as expensive as it gets. Awesome views of Beverly Hills, Wilshire Blvd. and the mountains beyond are the highlight of this classy apartment

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This apartment's building is set on a 3.5 acre lot that offers a pool, tennis court and fitness center. There's also valet parking and a concierge.  But if you have pets... well, that's OK! The listing boasts of the building's "rare pet friendly environment." 

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FHA Conforming Loan Limit: $410,000

Price: $409,000
Beds/Baths: 3/3
Sq. Ft.: 2,000

Chicago's conforming loan limit is substantially lower than those of Los Angeles or New York. At $409,000 this duplex flirts with its FHA-loan ceiling. The apartment's kitchen has a cherry-stained inlay floor with a breakfast bar. 

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In all, the home has 25 windows. If that's not enough to take in the views, you can venture out to the home's landscaped patio or enclosed balcony, "perfect for morning coffee," asserts the listing

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FHA Conforming Loan Limit: $420,000

Price: $419,000
Beds/Baths: 1/1
Sq. Ft.: 822

Our country's fifth largest city doesn't have property values as high as you might think. The relatively low median sale price of $305,000 pulls the FHA conforming loan limit down to $420,000. That delivers one bedroom and one bathroom in the case of this contemporary apartment. Is the stunning skyline looming outside the apartment's floor-to-ceiling windows worth that sum? Your call. 

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The hanging lights, gleaming marble countertops and hardwood floors make this space quite the flashy abode. But with only one bedroom, couch-surfing friends will probably have to take the, uh, couch.

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FHA Conforming Loan Limit: $271,050

Price: $270,000
Beds/Baths: 4/2
Sq. Ft.: 2,791

The Loan Star State's real estate comes pretty darn cheap and Houston dirt is no exception. The FHA will only insure your loan up to $271,050. But, considering bang-for-your-buck value in the state, that means the government will sponsor some pretty comfortable digs. This 2,791-square-foot traditional home offers four bedrooms on its well-landscaped plot. If the place strikes a chord with you, be sure to make the open house this weekend. See the listing for details. 

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Think back to that stylish Philly apartment. You know, the one-bedroom that cost in the neighborhood of $400,000? Now consider that this home's living room alone probably comes somewhere close to rivaling that apartment in total size. A reminder of just how much location determines value.

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FHA Conforming Loan Limit: $346,250

Price: $345,500
Beds/Baths: 4/3
Sq. Ft.: 2,707

Located on a cul-de-sac, this Phoenix home offers four bedrooms. At $345,500 it's priced close to $150,000 above the median sale price, allowing relatively well-heeled borrowers to take out substantial loans for as low as, you guessed it, 3.5 percent down. 

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Landscaped with native plants and trees and sited near a mountain, this shingle-roofed house boasts generous space, an outdoor patio and even a backyard. 

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FHA Conforming Loan Limit: $332,500

Price: $329,648
Beds/Baths: 4/4
Sq. Ft.: 3,106

While the space may distinguish this home on paper, the home's interior really seems to set it apart. There are stone-arched doorways, exposed-beam ceilings and black hardwood floors. All of it potentially attainable for just 3.5 percent.

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The decor of the place gives it an elegant glow. When you move from room to room, you might turn your head now and then. 

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Conforming Loan Limit: $271,050

Price: $269,500
Beds/Baths: 4/3
Sq. Ft.: 3,205

Less than $300,000 gets you this gleaming new traditional. The cream-colored interior's open floor plan and high ceilings make its 3,205 square feet feel even airier than it is. 

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With soaring ceilings, classy upholstery and quite a bit of space this Texas house seems almost like a luxury home. If it is, then it's a luxury home that costs only $84 per square foot. 

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FHA Conforming Loan Limit: $729,750

Price: $729,000
Beds/Baths: 3/2
Sq. Ft.: 2,149

Now move to $339 per square foot -- that's closer to the norm in San Jose, where the conforming loan limit, like its big brothers New York and Los Angeles, maxes out at the national limit of $729,750. 

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In addition to this sun porch, the ranch home offers a well-landscaped front yard and backyard with patio on its 1/5-acre plot.

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FHA Conforming Loan Limit: $387,500

Price: $379,900
Beds/Baths: 4/4
Sq. Ft.: 2,831

Ravaged by the foreclosure crisis, Jacksonville real estate values have plummeted over the last few years, allowing deals like this large single family. Priced at $379,900, the home is just shy of the point where the government steps back and says: "It's 20 percent from here on out." 

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Who knew you could find a glass-enclosed pool just yards from a pond on a property below $400,000. An amenity like this, plus the home's exquisite, varnished interior should be a reminder that today's market is, undoubtedly, a buyer's one. Worried you're not up to financial snuff? In case you didn't hear, you can buy a lot of homes like this one for just 3.5 percent down.

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