Mortgage rates stayed in the basement this week, as mortgage-backed securities that fund the vast majority of home loans continued to look like a safe bet to investors.
Rates on 30-year fixed-rate mortgages averaged 3.39 percent with an average 0.7 point for the week ending Nov. 1, down from 3.41 percent last week and 4.00 percent a year ago, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey. Rates for 30-year fixed-rate loans hit an all-time low in Freddie Mac records dating to 1971 of 3.36 percent during the week ending Oct. 4.
For 15-year fixed-rate loans, rates averaged 2.70 percent with an average 0.7 point, down from 2.72 percent last week and 3.31 percent a year ago. Rates for 15-year fixed-rate loans reached an all-time low in Freddie Mac records dating to 1991 of 2.66 percent during the week ending Oct. 18.
Rates on 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.74 percent with an average 0.6 point, down from 2.75 percent last week and 2.96 percent a year ago. Rates on five-year ARM loans hit a low in records dating to 2005 of 2.69 percent during the week ending July 19.
For 1-year Treasury-indexed ARMs, rates averaged 2.58 percent with an average 0.4 point, down from 2.59 percent last week and 2.88 percent a year ago. Rates on one-year ARM loans hit an all-time low in records dating to 1984 of 2.57 percent during the week ending Oct. 4.
A weekly survey by the Mortgage Bankers Association showed demand for purchase mortgages was up a seasonally adjusted 1 percent during the week ending Oct. 26 when compared to the week before, and up 6 percent from the same week a year ago.
Members of the Federal Reserve’s Open Market Committee said last week they expect to keep their target for short-term interest rates at "exceptionally low levels" at least through mid-2015.
The Fed is also keeping mortgage rates low, by boosting purchases of mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac by $40 billion a month. Economists at Fannie Mae think the open-ended program may continue through next year and into 2014.