Fixed-rate mortgages hit all-time low
The average interest rate on a 30-year, fixed-rate mortgage reached 4.01% for the week ending Sept. 29, the lowest ever recorded on the Freddie Mac survey. The 15-year FRM also averaged a record low 3.28% for the week. The new lows come after the Federal Reserve announced it would buy $400 billion of long-term Treasury bonds and reinvest in agency mortgage-backed securities in order to keep borrowing costs down. "Fixed mortgage rates fell to all-time record lows this week following the Federal Reserve's announcement," said Freddie Mac Chief Economist Frank Nothaft. However, adjustable-rate mortgages were unchanged. The 5-year Treasury-indexed hybrid ARM averaged 3.02% with an average 0.6 point, the same as last week. The 1-year Treasury-indexed ARM averaged 2.83% with an average 0.6 point, up only 1 basis point from the prior week. Nothaft pointed out several other indices were showing signs of improvements in the housing sector. The Federal Housing Finance Agency reported its home price index increased for the fourth-straight month in July. The Standard & Poor's/Case-Shiller HPI also increased that month. But those were the result of the typical home-buying season. It remains to be seen whether or not the historically low rates from the Fed's action would prop up the market through a more challenging winter, especially when the previous rounds of quantitative easing failed to boost the economy to recovery. The first signs appeared Thursday when the National Association of Realtors showed August pending home sales fell 1.2%. Write to Jon Prior. Follow him on Twitter @JonAPrior.