Long-Term Mortgage Rates Fall to 4th Consecutive Record Low of 5.01%

Washington, D.C.–Interest rates for fixed-rate 30-year mortgages fell for the 10th week to another record low due in part to the Federal Reserve’s recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae, says Freddie Mac.The 30-year fixed-rate mortgage (FRM) averaged 5.01 percent with an average 0.6 point for the week ending Jan. 8, 2009, down from last week when it averaged 5.10 percent, according to Freddie Mac’s latest results of its Primary Mortgage Market Survey (PMMS). Multifamily loans are generally priced relative to Treasury yields. Since 10-year Treasury yields hit 50-year lows in December, it is safe to say that rates on multifamily loans also dipped. “On November 25, 2008, the Federal Reserve announced that it planned to purchase up to $500 billion of these securities by the end of June of this year. For the sake of comparison, there were roughly $4.7 trillion of such securities backed by home mortgages available as of September 30, 2008,”  says Frank Nothaft, Freddie Mac vice president and chief economist. Last year at this time, the 30-year FRM averaged 5.87 percent, according to Freddie Mac. The 30-year FRM has not been lower since Freddie Mac started the Primary Mortgage Market Survey in 1971. Freddie Mac reported the 15-year FRM this week averaged 4.62 percent with an average 0.7 point, down from last week when it averaged 4.83 percent. A year ago at this time, the 15-year FRM averaged 5.43 percent.  The 15-year FRM has not been lower since June 13, 2003, when it averaged 4.60 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.49 percent this week, with an average 0.7 point, down from last week when it averaged 5.57 percent. A year ago, the five-year ARM averaged 5.63 percent.  One-year Treasury-indexed ARMs averaged 4.95 percent this week with an average 0.5 point, up from last week when it averaged 4.85 percent.  At this time last year, the 1-year ARM averaged 5.37 percent.  “Since the end of October 2008, these rates have declined by almost 1 1/2 percentage points, or payment savings of about $184 a month for a $200,000 loan. – an additional $11 dollars from last week.”