Record Rates Helping Real Estate

It’s been quite the record-setting year.
For the third time in 2011, mortgage rates last week set new all-time lows.
According to Freddie Mac, each mortgage rate either matched or set a new record low for the week ending December 22.
*30-year fixed-rate mortgage (FRM): Averaged 3.91 percent, down from last week’s record low of 3.94 percent. Last year at this time, the 30-year FRM averaged 4.81 percent.
*15-year FRM: Averaged 3.21 percent to match last week’s record low of 3.21 percent. A year ago at this time, the 15-year FRM averaged 4.15 percent.
*5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM): Averaged 2.85 percent to hit a new all-time low, down from last week’s 2.86 percent. A year ago, the 5-year ARM averaged 3.75 percent.
*1-year Treasury-indexed ARM: Averaged 2.77 percent this week for a new record low, down from last week’s 2.81 percent. At this time last year, the 1-year ARM averaged 3.40 percent.
“Rates on 30-year fixed mortgages have been at or below 4 percent for the last eight weeks and now are almost 0.9 percentage points below where they were at the beginning of the year, which means that today’s homebuyers are paying over $1,200 less per year on a $200,000 loan,” said Frank Nothaft, vice president and chief economist of Freddie Mac.
“This greater affordability helped push existing home sales higher for the second consecutive month in November to an annualized pace of 4.42 million, the most since January. In addition, new construction of one-family homes also showed a back-to-back monthly gain in November to the largest increase since June. Moreover, homebuilder confidence in December rose to its highest reading since May 2010 according to the NAHB/Wells Fargo Housing Market Index.”
Seems like a great way to round out a rough real estate year.