Mortgage Rates Print Lowest Levels in Nearly 40 Years

According to Freddie Mac’s (FRE) Primary Mortgage Market Survey, long-term U.S. mortgage rates this week reached the lowest level in at least 39 years. The 30-year fixed-rate mortgage [FRM] averaged 4.78% for the week ending April 30, 2009, down from last week when it averaged 4.80%. Last year at this time, the 30-year FRM averaged 6.06%.

» The 30-year FRM has never been recorded lower in Freddie Mac’s survey, since the company started keeping track in 1970.

» The 15-year FRM this week averaged 4.48%, unchanged for the third week in a row. This is the lowest the 5-year ARM has been since Freddie Mac began tracking it in August 1991.

» Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.80% this week, down from last week when it averaged 4.85%. This is the lowest the 5-year ARM has been since Freddie Mac began tracking it in January 2005.

From Freddie Mac: “Rates for fixed-rate mortgages hovered at record lows this week as ARM rates eased further,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Mortgage rates for 30-year fixed rate mortgages…..are more than 1.6 percentage points below the recent peak set at the end of October 2008. For a $200,000 loan, this means a monthly savings of almost $212 in mortgage payments or over $2,500 per year….

“The housing market may be edging towards a bottom. Existing home sales stayed near its four-month average in March while new home sales were stronger than the market consensus. More importantly, the inventory of unsold new homes fell to the lowest number since January 2002. And, the S&P/Case-Shiller® 20-city composite index did not show a record year-over-year decline in February for the first time since December 2006. Finally, housing affordability hit record highs in the first quarter of this year, according to figures from the National Association of Realtors, which date back to January 1971.”

According to Freddie borrowers who refinanced their mortgages in Q1’09 reduced their mortgage payments in aggregate by about $2.5 billion over the coming year.