National Real Estate News - Record low mortgage rates provide record high affordability



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Record Low Mortgage Rates Provide Record High Affordability

 Following a report from the National Association of Realtors that revealed housing affordability reached a record high in the first quarter, mortgage rates continue to plummet to their lowest levels in industry history.
Following a report from the National Association of Realtors that revealed housing affordability reached a record high in the first quarter, mortgage rates continue to plummet to their lowest levels in industry history. 
 

Wednesday, June 13th, 2012

 

 

Following a report from the National Association of Realtors that revealed housing affordability reached a record high in the first quarter, mortgage rates continue to plummet to their lowest levels in industry history.

Freddie Mac's Primary Mortgage Market Survey for the week ending June 7 indicates that the potential buyers have a great opportunity to become homeowners, as mortgage rates fell to new all-time record lows for the sixth consecutive week. When combined with low home prices, buyers are offered optimal affordability.

The average 30-year fixed-rate mortgage rate received was 3.67 percent, down from the previous week when it averaged 3.75 percent. Both rates were notably lower than this time last year when the 30-year FRM rate averaged 4.49 percent. Additionally, the 15-year FRM rate averaged 2.94 percent, slightly lower than the week earlier when it averaged 2.97 percent and far lower than a year ago when it was 3.68 percent. According to the survey, the 5-year adjustable mortgage rate average matched that from the week before, averaging 2.84 percent. Shorter-term loans allow homeowners to pay off their mortgage without dedicating much toward accrued interest, but comes with higher monthly payments.
 
While high affordability is beneficial for all buyers, first-time buyers may see even more benefits, according to National Association of Realtors.

"It's never been easy to buy a first home because of the cash required for down payment and closing costs, but conditions for first-time buyers who are able to get a mortgage have never been better," NAR President Moe Veissi explained. First-time buyers not only benefit from federal programs, such as loans backed by the Federal Housing Administration, but also receive a number of tax breaks and credits for making the big investment.