According to Freddie Mac (FRE), the average 30-year fixed-mortgage interest rate, for the week ending Dec-18, is officially 5.19%. The rate is down from last week’s average of 5.47% and has not been lower since Freddie started the Primary Mortgage Market Survey in 1971. Last year at this time, the 30-year fixed-rate averaged 6.14%.
Many experts are predicting the 30-year fixed-rate will fall below 5%. The Fed’s move on Dec. 16 to slash its target interest rate to a range of zero to 1/4%, lowered the rate on which most adjustable-rate mortgages are based. As a result, mortgage experts now say homeowners could soon see ARMs of 2.5% to 4%. The one-year ARM now averages 4.94%. The one-year ARM was 5.51% a year ago.
The 15-year fixed-rate mortgage has also been affected, averaging 4.92%, down from 5.2% last week and 5.79% yoy. The 15-year fixed has not been lower since April 1, ’04, when it averaged 4.84%.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.60% this week, down from last week when it averaged 5.82%. A year ago, the five-year ARM averaged 5.90%.
One-year Treasury-indexed ARMs averaged 4.94% this week. At this time last year, the 1-year ARM averaged 5.51%.
The government is said to be considering a single 4.5% rate for people buying new and existing homes. Meanwhile, the housing industry is pushing for 2.99% ; a scenario that would require the government to buy and guarantee those loans.