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Mortgage Rates Still Falling

The 30-year fixed-rate mortgage and the 15-year fixed-rate mortgage both set new record lows this week, according to Freddie Mac's latest survey released Thursday.

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Freddie Mac's chief economist, Frank Nothaft, believes the new lows are the result of concerns surrounding the European debt market.

""Continued investor concerns over the state of the European debt markets kept U.S. Treasury bond yields low and allowed mortgage rates to ease once more this week,"" Nothaft stated.

The 30-year fixed rate averaged 4.09 percent (0.7 point) for the week after averaging 4.12 percent last week and 4.37 percent one year ago.

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The 15-year fixed rate fell to 3.30 percent (0.6 point) from 3.33 percent last week and 3.82 percent last year.

""In comparison, the average interest rate of mortgages outstanding in the second quarter was 5.28 percent,"" Nothaft said. ""By refinancing into today's 30-year fixed mortgage, homeowners could shave almost $1,715 a year in interest payments on a $200,000 loan.""

The 1-year Treasury-indexed adjustable rate also decreased from last week, falling from an average of 2.84 percent to 2.81 percent (0.6 point.) It is also down from last year this time when it averaged 3.40 percent.

In contrast, the 5-year Treasury-indexed hybrid adjustable-rate mortgage increased this week from 2.96 percent last week to 2.99 percent this week (0.6 point). The rate is below that of this time last year when its average was 3.55 percent.

""Apart from just fixed-rate mortgages, various other interest rates are at or near all-time historical lows as well,"" Nothaft said.

Nothaft continued, ""Both the 10-year constant-maturity Treasury bond and AAA-rated seasoned corporate bond yields were at 50-year lows over the week ending September 9th. In addition, the 1-year constant-maturity bill, a popular index for ARMs, hit its nadir over the week of September 2nd since data began in 1952.""

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.
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