Mortgage Rates Hit New Record Low of 3.91 Percent as 2011 Nears Close

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing average fixed mortgage rates at or near all-time record lows helping to keep homebuyer affordability high. The 30-year fixed-rate mortgage (FRM) averaged 3.91 percent with an average 0.7 point for the week ending Dec. 22, 2011, down from last week when it averaged 3.94 percent. Last year at this time, the 30-year FRM averaged 4.81 percent. The 15-year FRM this week averaged 3.21 percent with an average 0.8 point, matching last week when it averaged 3.21 percent. A year ago at this time, the 15-year FRM averaged 4.15 percent. "Rates on 30-year fixed mortgages have been at or below four percent for the last eight weeks and now are almost 0.9 percentage points below where they were at the beginning of the year, which means that today's homebuyers are paying over $1,200 less per year on a $200,000 loan," said Frank Nothaft, vice president and chief economist, Freddie Mac. "This greater affordability helped push existing home sales higher for the second consecutive month in November to an annualized pace of 4.42 million, the most since January. In addition, new construction of one-family homes also showed a back-to-back monthly gain in November to the largest increase since June. Moreover, homebuilder confidence in December rose to its highest reading since May 2010 according to the NAHB/Wells Fargo Housing Market Index." The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.85 percent this week, with an average 0.6 point, down from last week when it averaged 2.86 percent. A year ago, the five-year ARM averaged 3.75 percent. The one-year Treasury-indexed ARM averaged 2.77 percent this week with an average 0.6 point, down from last week when it averaged 2.81 percent. At this time last year, the one-year ARM averaged 3.40 percent.