By Donna Gehrke-White, Sun Sentinel –
Average interest rates on 30-year, fixed-rate home loans hit a new low at 3.91 percent last week, while 15-year, fixed-rate mortgages stayed at its record low, Freddie Mac reported.
The average 30-year, fixed-rate mortgage declined from 3.94 percent, according to Freddie Mac.
A year ago it was nearly a point higher at 4.81 percent.
Average interest rates on 15-year, fixed rate home loans remained at a record low of 3.21 percent.
For two weeks now, the rates on 15-year loans have been lower than the record set on Oct. 6, Freddie Mac said.
A year ago, the interest rate on the 15-year loan was nearly a point higher at 4.15 percent.
“Rates on 30-year fixed mortgages have been at or below 4 percent for the last eight weeks and now are almost .9 percentage points below where they were at the beginning of the year, which means that today’s homeowners are paying over $1,200 less per year on a $200,000 loan,” said Frank Nothaft, Freddie Mac vice president and chief economist. “This greater affordability helped push existing home sales higher for the second consecutive month.”
Total upfront costs for 30-year, fixed-rate loans averaged .7 percent of the price of the home being bought; for 15-year loans it was at .8 percent, according to Freddie Mac. The buyers also may pay closing costs, which are not included in the survey.
Freddie Mac’s longer name is the Federal Home Loan Mortgage Corp. It is a government-sponsored enterprise set up in 1970 to buy mortgages on the secondary market to expand the money available for home loans.