According to Freddie Mac and the Mortgage Bankers Association, there has been an increasing request for loans as rates flow downward. Freddie Mac released a result of the latest Primary Mortgage Market Survey; it showed an average of 3.40% on rates of 30-year fixed-rate loans when September closed, much lower than the 3.49% recorded for third week of September, and a 4.01% one year before. Last time Freddie Mac recorded a rate this low was way back year 1971.
For 15-year fixed-rate loans, rates downed to 2.73% from 2.77% on the third week, and a 3.28% a year ago. This rate can equate to the value that was recorded last 1991.
Five-year ARM loans hit an average of 2.71% from 2.76% on the third week of September, and a 3.02% as recorded last year. The percentage 2.69% was a record-breaking event that is equal to what was recorded last July of 2005.
A year ago, one-year ARM loans were 2.83%. Now, the rates have recorded an average of 2.60%. This rate is parallel to the rates recorded from 1984, which have never been this low before.
Frank Nothaft, chief economist of Freddie Mac, said that the continuing decline of fixed mortgage rates is because of the purchases of mortgage securities by the Federal Reserve and the continuing progressive real estate market. Homes sold last July and August were its strongest since March and April 2010.
Federal Reserve announced last September 13 that it would dive into its third cycle of quantitative easing “QE3” by adding its procurement of mortgage-backed securities as assured by Fannie Mae and Freddie Mac.
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