Rates on 30-year fixed mortgages remained at an all-time record low for the second week in a row.
The 30-year fixed rate held at an average of 3.88% for this week ending February 9, the lowest rate ever recorded in the 40-year history of the Freddie Mac Primary Mortgage Market Survey. That compares with a 5.05% rate recorded the same time just a year ago.
In the meantime the 15-year fixed rate inched a bit higher to an average of 3.16%, up from the record 3.14% it set in the previous week. The 5-year Treasury-indexed adjustable rate mortgage and the 1-year Treasury-indexed adjustable rate mortgage also saw modest gains.
Frank Nothaft, vice president and chief economist at Freddie Mac, attributed the increases to last Friday’s much better-than-expected jobs report which seems to be helping most of the country. The report showed that the economy gained 243,000 jobs last month and the unemployment rate eased to 8.3% — the lowest rate since February 2009, thankfully it proves taht we are getting slowly and steadily back on track.
“A strong January employment report added upward pressure to most mortgage rates this week,” said Nothaft.
Nevertheless, the historically-low rates are great news for homeowners looking to refinance their mortgages — a move many homeowners may soon be hoping to make. The same day Freddie’s mortgage rate survey was released, federal and state officials announced a $26 billion foreclosure settlement which with 49 states involved the big five of the nation’s largest home lenders including Bank of America, Wells Fargo, Citibank, Ally (formerly GMAC), and JP Morgan, over charges of foreclosure made without proper paperwork and protocols, known as “robo-signing”.
At least $17 billion of the settlement will go toward reducing the principal of mortgages held by homeowners who owe more on their home than it is worth and are behind on payments. Which could help more homeowners stay in their homes a very promising sign to help shore up the local Real Estate markets.
Another $3 billion will go toward refinancing mortgages for borrowers who are current on their payments — offering them a chance to realize substantial savings on monthly payments. Another good sign for current homeowners who would otherwise be looking into alternatives like possible short sale or foreclosures.
Those new record rates were fortuitously timed for the Obama administration to announce its latest refinancing proposal, which aims to help millions of homeowners refinance. The plan, which requires approval by Congress, would allow borrowers who are current on their mortgage to save an average of $3,000 a year by refinancing into loans backed by the Federal Housing Administration. Lets hope Congress can sign this bill into effect without tying it up in debates so our country can continue to improve our struggling economy and people can either hold unto the dream of homeownership or become part of it.
