By Amy Hoak, MarketWatch
CHICAGO (MarketWatch) — Mortgage rates reached record lows this week, following the Federal Reserve’s policy statement last week and continued concerns over the European debt market, Freddie Mac’s chief economist said on Thursday.
Rates on the 30-year fixed-rate mortgage were at their lowest in 50 years for the week ending Aug. 18, averaging 4.15%, according to Freddie Mac’s weekly survey of conforming mortgage rates. The previous record low for the mortgage was 4.17%, set in November. The mortgage averaged 4.32% last week and 4.42% a year ago.
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Other mortgages tracked in the survey broke the record lows they hit last week.
Fifteen-year fixed-rate mortgages averaged 3.36% this week, down from 3.5% last week and 3.9% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.08%, down from 3.13% last week and 3.56% a year ago. And 1-year Treasury-indexed ARMs averaged 2.86%, down from 2.89% last week and 3.53% a year ago.
To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.7 point, the 15-year fixed-rate mortgage and the 1-year ARM required an average 0.6 point and the 5-year ARM required an average 0.5 point. A point is 1% of the mortgage amount, charged as prepaid interest.
“The Federal Reserve’s policy statement last week and ongoing market concerns over the European debt market carried momentum into this week allowing all mortgage products in our survey to reach all-time record lows,” said Frank Nothaft, vice president and chief economist of Freddie Mac, in a news release.
Many homeowners have taken advantage of the low-rate environment by refinancing, he added.
“The refinance share of applications averaged nearly 70% of all mortgage activity in the first half of this year, according to our survey. In addition, an increasing share of refinancing borrowers chose to shorten their loan terms during the second quarter,” Nothaft said.
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