Freddie Mac Reports New Record Lows for Fixed Rates

Fixed mortgage rates dropped to all-time record lows ""amid indicators of higher consumer confidence and lower wholesale prices,"" according to Freddie Mac's ""Primary Mortgage Market Survey"":http://www.freddiemac.com/news/finance/index.html.

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According to the survey, the rate on a 30-year fixed-rate mortgage (FRM) averaged 3.34 percent (0.7 point) for the week ending November 15, down from 3.40 percent the week before. The previous low record for the 30-year fixed was 3.36 percent, set the week of October 4 this year.

The 15-year fixed average also fell to a new low, dipping to 2.65 percent (0.7 point) from 2.69 percent the week before. The previous low record for an average 15-year FRM was 2.66 percent, set the week of October 18 this year.

Figures for adjustable-rate mortgages (ARMs) were mixed. The 5-year Treasury-indexed hybrid ARM averaged 2.74 percent (0.6 point), up from 2.73 percent previously. On [COLUMN_BREAK]

the other hand, the 1-year ARM average fell, declining to 2.55 percent (0.3 point) from 2.59 percent.

Frank Nothaft, VP and chief economist for Freddie Mac, explained the dip in fixed rates was a reaction to increased optimism.

""Fixed mortgage rates eased this week to record lows on indicators of higher consumer confidence and lower wholesale prices,"" Nothaft said. ""Consumer sentiment rose in November to the highest reading since July 2007 according to the University of Michigan. Meanwhile, the core producer price index fell 0.2 percent in October.""

Fixed rates also fell in ""Bankrate's"":http://www.bankrate.com/ weekly survey, though they didn't break any records. The 30-year fixed average fell three basis points to 3.54 percent, while the 15-year fixed average fell only one basis point to 2.87 percent.

The 5/1 ARM remained unchanged from last week at 2.72 percent, Bankrate reported.

The site's ""trend survey"":http://www.bankrate.com/news/rate-trends/mortgage.aspx found analysts divided about where rates will go from here. One-third believe rates will increase, while one-quarter say there will be another drop. The rest--about 42 percent--don't expect any major changes as investors wait for a sign from policymakers.

""There are many unresolved, large issues: the fiscal cliff, the European Union and disappointing corporate earnings as starts,"" said Dick Lepre, senior loan officer at RPM Mortgage. ""Until there is resolution, or at least something passing for resolution of the fiscal cliff issue, markets will be filled with uncertainty. Uncertainty keeps rates low.""