Industry NewsMortgage

Prime loans dip below 5%

Slow economy, Fed support pushing rates down

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Rates on 30-year fixed-rate mortgages dropped below 5 percent this week -- something never seen before in the 37 years Freddie Mac's been conducting its Primary Mortgage Market Survey. The 30-year fixed-rate mortgage (FRM) averaged 4.96 percent with an average 0.7 point for the week ending Jan. 15, down from 5.01 percent last week and 5.69 percent a year ago. The survey is based on first-lien prime conventional conforming mortgages with down payments of 20 percent. Rates are higher for borrowers seeking "jumbo" loans or for those providing smaller down payments requiring government or private mortgage insurance. While low rates on conventional, conforming loans is good news for qualified borrowers who can meet Freddie Mac and Fannie Mae's underwriting standards, the drop in mortgage rates also reflects grim economic news and large-scale government intervention in mortgage markets. Unemployment rose to 7.2 percent in December, the highest since January 1993, and...