Fixed-Rate Mortgages Continue to Set Record Lows, Hit the 3.36 Percent Mark

Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), showing average fixed mortgage rates falling to new all-time record lows for the second consecutive week on mortgage securities purchases by the Federal Reserve and indicators of a weakening economy. The 30-year fixed-rate mortgage (FRM) averaged 3.36 percent with an average 0.6 point for the week ending Oct. 4, 2012, down from last week when it averaged 3.40 percent. Last year at this time, the 30-year FRM averaged 3.94 percent.  The Federal Reserve's purchase of long-term fixed mortgage securities allowed the 15-year fixed-rate mortgage at 2.69 percent to fall below the five-year adjustable rate mortgage's (ARM's) rate at 2.72 percent. A year ago at this time, the 15-year FRM averaged 3.26 percent. The last time the average 15-year fixed was lower than the five-year ARM was the week ending Oct. 15, 2009. "Fixed mortgage rates fell again this week to all-time record lows due to the mortgage securities purchases by the Federal Reserve and indicators of a weakening economy," said Frank Nothaft, vice president and chief economist, Freddie Mac. "The final estimate of growth in Gross Domestic Product was revised down to 1.3 percent in the second quarter, representing the slowest growth in a year. In addition, personal incomes rose only 0.1 percent in August, while July's increase was revised downward. And finally, pending home sales in August fell 2.6 percent, well below the market consensus forecast of a slight increase." The one-year Treasury-indexed ARM averaged 2.57 percent this week with an average 0.4 point, down from last week when it averaged 2.60 percent. last week. At this time last year, the one-year ARM averaged 2.95 percent.