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Average FRM Rates Slips to New Record Lows, ARM Rates Don't Budge
|While rates were previously predicted to increase from record lows reached in October, new data from Freddie Mac shows average rates for fixed-rate mortgage have dropped to a bottom level in November.
Monday, December 17th, 2012
To offset a historically less busy time for the real estate industry, mortgage rates are often lower throughout the fall and winter months, which helps promote activity. While rates were previously predicted to increase from record lows reached in October, new data from Freddie Mac shows average rates for fixed-rate mortgage have dropped to a bottom level in November.
Data from the most recent Primary Mortgage Market Survey, for the week ending November 21, shows FRMs fell to a new record low for the second week in a row, with the average rate for 30-year FRMs slipping to 3.31 percent. This is down from the previous week's average of 3.34 percent and well below the average rate of 3.98 percent recorded this time last year. This type of mortgage loan continues to be a popular option for first-time buyers, as it provides stability through a constant rate and predictable payment amounts.
In addition, homebuyers who can afford a higher monthly payment in exchange for a lower interest rate may be interested to know the average rate for 15-year FRMs dropped as well, to a new record low of 2.63 percent. According to data from Freddie Mac, this is lower than last week's average of 2.65 percent and still significantly down from a year ago when it averaged 3.3 percent.
The vice president and chief economist of Freddie Mac, Frank Nothaft, says the improving economy will continue to influence mortgage rates, while sellers, buyers and builders are all becoming more confident.
"Fixed mortgage rates continued to ease somewhat this week to record lows and should help the ongoing housing recovery. Already, new construction on homes was up 3.6 percent in October to the strongest pace since July 2008. In November, homebuilder confidence rose for the sixth straight month to its highest reading since June 2006 according to the NAHB/Wells Fargo Housing Market Index. And existing home sales increased 2.1 percent in October to an annualized pace of 4.79 million, exceeding the market consensus forecast." While the fall and winter seasons are both traditionally slower when it comes to applications and sales throughout much of the country, the affordability offered by these mortgage rates may prompt many prospective buyers to make the leap soon.
National real estate trends have a major impact on the real estate market on a daily basis. Keeping up-to-date on the latest news and notes posted by GL Homes can make sure those looking for South Florida homes know exactly how the current market will affect them.