We all know about the current historic low mortgage rates. Today’s report from Freddie Mac survey indicated a 3.55 percent average on a 30-year fixed rate mortgage. Sometimes it is worth reviewing past data, particularly for the younger generation, to check just how low the rates are today.
The average rate for a 30-year fixed rate mortgage hit another all-time low last week according to Freddie Mac. Last week’s average rate was 3.49 percent, breaking the 3.5 percent threshold and more than a full point below the 4.55 percent average from a year ago at this time. While the historic rate means great things for affordability, it also appears to be historically difficult to qualify for these record low rates.
The administration introduced HARP 2.0 in the fall, which among other things eliminated the loan-to-value limits on certain loans refinanced by Fannie Mae and Freddie Mac. Those changes were put in place in March and appear to have made an impact, though that impact is muted. A robust HARP could reduce the cost of homeownership for roughly 3 to 4 million borrowers, thereby prevent some foreclosures in areas experiencing a fledgling recovery, boost confidence in the housing market and help to modestly stimulate the economy.
With a win by the socialist party in France’s presidential election, bond investors will be shifting money into U.S., U.K. and Germany. That means lower mortgage rates, at least temporarily, for U.S. consumers.
The 10-year borrowing rate for German bonds fell and now stands at 1.58%. By contrast, the French government has to pay a 2.78% interest rate. The comparable U.S. and U.K. borrowing rates are 1.86% and 2.00%, respectively.