Thirty-Year Mortgage Rate Drops to 3.98%, ARMs Hit New Lows

Data released by ""Freddie Mac"":http://www.freddiemac.com Wednesday shows mortgage interest rates across the board edged lower for the shortened holiday week, with the 30-year fixed rate slipping to its second-lowest reading on record and adjustable-rate mortgages (ARMs) setting new all-time lows.

The 30-year fixed-mortgage rate has averaged at or below 4 percent for four consecutive weeks now. For the week ending November 23, Freddie Mac's study puts the average 30-year rate at 3.98 percent (0.7 point). That's down from 4.00 percent the week prior.

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The only time Freddie has recorded a lower 30-year rate average was for the week of October 6, 2011, when it came in at 3.94 percent.

The 15-year fixed-rate mortgage posted an average of 3.30 percent (0.7 point) in ""Freddie Mac's latest survey"":http://www.freddiemac.com/pmms/. It was 3.31 percent last week.

The 5-year ARM is averaging 2.91 percent (0.6 point), down from 2.97 percent last week. The 1-year ARM slipped from 2.98 percent to 2.79 percent (0.6 point) this week. Rates for both ARM terms are the lowest ever recorded by the GSE.

""Mortgage rates eased slightly this week with fixed-rate loans hovering above all-time lows and ARMs reaching a new nadir,"" commented Frank Nothaft, Freddie Mac's chief economist.

He says the high-degree of home-buyer affordability in recent months translated into a 1.4 percent pickup in existing home sales during October, as measured by the National Association of Realtors.

Nothaft noted, however, that the trade group also reported a sharp increase in contract cancellations in October, with a third of its members seeing at least one contract fall through during the month. This ""restrained sales from achieving a stronger rebound,"" according to Nothaft.