Thirty-Year Fixed Mortgage Rate Dips Below 4% Threshold

The average 30-year fixed-rate mortgage came in at 3.99 percent this week, according to data released Thursday by ""Freddie Mac"":http://www.freddiemac.com.

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It's the second time this year the rate has dropped below the 4.00 percent mark, and is the second lowest reading in the history of ""the GSE's survey"":http://www.freddiemac.com/pmms/. It averaged 3.94 percent for the week ending October 6, 2011.

At 3.99 percent (0.7 point) for the week ending November 10, 2011, the 30-year rate shaved off one basis point from last week’s average of 4.00 percent. Last year at this time, the 30-year fixed rate was 4.17 percent, and as recently as February, it was 5.05 percent.

Freddie Mac described rate movement overall as “changing little” from the previous week amid a mix of economic data reports.

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The 15-year fixed rate also budged just one basis point, slipping from 3.31 percent last week to 3.30 percent (0.8 point) this week. A year ago at this time, the 15-year rate averaged 3.57 percent.

While fixed rates edged lower, adjustable-rate mortgages (ARMs) moved in the opposite direction.

The 5-year ARM rose to 2.98 percent (0.6 point) in Freddie’s study, up from 2.96 percent last week. Turn the clock back 12 months, and the 5-year ARM was averaging 3.25 percent.

The 1-year ARM posted the biggest change in one week’s time, jumping to 2.95 percent (0.6 point) from 2.88 percent. This time last year, the 1-year ARM averaged 3.26 percent.

Frank Nothaft, Freddie Mac’s chief economist, says these low mortgage rates, combined with soft house prices have kept homebuyer affordability historically high.

He cites data from the National Association of Realtors (NAR), which shows 74 percent of major metros with annual home price declines in the third quarter. Over that same period, Nothaft says 30-year fixed mortgage rates averaged 4.3 percent as opposed to 4.7 percent in the second quarter.

“These factors helped raise September's NAR Housing Affordability Index to the third highest reading on record which dates back to 1971,"" Nothaft said.

Freddie Mac’s regularly weekly rate study draws its results from 125 lenders across the country.