News Column

US Fixed Mortgage Rates Are Still Near Record Lows

Oct 12 2012

U.S. fixed mortgage rates this week edged up slightly higher while remaining near record lows, showed the Primary Mortgage Market Survey released Thursday by Freddie Mac.

The mortgage giant said that 30-year fixed-rate mortgage (FRM) was 3.39 percent in the week ending Oct. 11, up from last week's 3.36 percent. It has been below 4 percent all but one week in 2012.

The 15-year FRM, a popular choice for those looking to refinance, went up to 2.70 percent from 2.69 percent in the previous week. It has been below 3 percent since the last week in May.

Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) inched up to 2.73 percent, while the 1-year Treasury- indexed ARM was up to 2.59 percent.

Before locking in the low rates, borrowers have to pay banking service fees, also known as points, which are calculated as a percentage of the loan, typically between 0.4 to 0.7.

The U.S. Federal Reserve last month announced a new bond purchase plan of purchasing agency mortgage-backed securities (MBS) at a pace of 40 billion U.S. dollars per month, which directly dragged down the fix mortgage rates.

Lower rates have played as an important incentive to house refinancing and buying since last fall. The housing market has been picking up steam as the economy continues to expand modestly in recent months, the Fed said in a report on Wednesday.

However, many economists hold that the market still needs years to recover entirely as the bottom will be prolonged.

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Source: Copyright Xinhua News Agency - CEIS 2012

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