3.56: Another Week, Another Record Low

Again this week, fixed mortgage rates dropped to a new record low.

This morning, Freddie Mac reported 3.56 percent with an average 0.7 point as the average on a 30-year fixed mortgage, down from last week’s previous record low of 3.62 percent. Last year at this time, long-term rates were at 4.51 percent.

From Freddie Mac vice president and chief economist Frank Nothaft:

Following a lackluster employment report for June, long-term U.S. Treasury bond yields eased somewhat this week allowing fixed mortgage rates to reach yet another record low. Only 80,000 net new jobs were added to the economy last month, not enough to lower the unemployment rate from 8.2 percent.

 This was the concern of the Federal Reserve’s monetary policy meeting held June 19-20. Minutes released from that meeting on July 11, revealed that a few members felt further monetary stimulus was needed to promote satisfactory growth in employment to meet the Committee’s goal..

To put the year-over-year rate change in perspective, we compared the payments on a three-bedroom row house on the market for $548,800 at today’s interest rates versus what they would’ve been a year ago.

Monthly payment calculations based on a 20 percent down payment and a 30-year fixed rate mortgage at 4.51%:

Loan Amount: $439,040
Principal and Interest: $2,227
Property Tax: $191
Total Monthly Payments: $2,418
Monthly payment calculations based on a 20 percent down payment and a 30-year fixed rate mortgage at 3.56%:

Loan Amount: $439,040
Principal and Interest: $1,986
Property Tax: $191
Total Monthly Payments: $2,177

The UrbanTurf Mortgage Rate Disclaimer: The rates reported by Freddie Mac for 30-year mortgages are usually the best rates that the most qualified borrowers can get, so borrowers or those considering refinancing should not necessarily read this news and think that they can go out and get a loan with the quoted interest rate.

Here’s a look at the path of rates since January 2010:



by Shilpi Paul/ Urban Turf