US fixed mortgage rates back to record lows

September 21st, 2012 - 1:31 pm ICT by IANS  

Washington, Sep 21 (IANS) US fixed mortgage rates this week fell back to record lows after the Federal Reserve announced last week a new round of quantitative easing, also known as the QE3, said the Primary Mortgage Market Survey released by Freddie Mac.

The mortgage giant said that 30-year fixed-rate mortgage (FRM) was 3.49 percent in the week ending Sep 20, down from last week’s 3.55 percent. Last year at this time, the 30-year FRM was 4.09 percent, reported Xinhua.

The 15-year FRM, a popular choice for those looking to refinance, declined to 2.77 percent from 2.85 percent in the previous week. A year ago at this time, the 15-year FRM averaged 3. 29 percent.

Meanwhile, the 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) inched up to 2.76 percent, and the one-year Treasury-indexed ARM remained unchanged at 2.61 percent.

The Fed announced last Thursday a new bond purchase plan — to purchase agency mortgage-backed securities (MBS) at a pace of $40 billion per month. This will help speed up the recovery of the US housing sector, and directly brought fixed mortgage rates to their all-time lows, noted Freddie Mac.

Lower rates have served as an important incentive to house refinancing and buying since last fall. With recent data showing constant modest improvements, the US housing market is said to have bottomed out.

However, many economists believe that the market still needs years to completely recover.

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