Mortgage interest rates moved a little higher during the past week, but overall this has been a great year for rates according to mortgage finance giant Freddie Mac on Thursday.

The average rate on a 30-year fixed rate mortgage inched up to 5.03 percent, excluding points, from 5.00 percent the week before. One year ago, however, the average rate was more than a point and a half higher at 6.46 percent.

The average rate on a 15-year FRM grew to 4.46 percent, up from 4.43 percent last week and one-year adjustable rate mortgages carried an average rate of 4.57 percent, up slightly from 4.54 percent.

“Interest rates for 30-year fixed mortgages have averaged just below 5 percent this year, which is the lowest 10-month average since the survey began in 1971,” said Frank Nothaft, Freddie Mac vice president and chief economist. “As a result, refinance activity has accounted for almost seven out of ten mortgage applications on average this year.”

So why didn’t rates move much this week? According to a survey from BankRate.com, the incoming economic data sent mixed signals to the mortgage markets, as investors quickly bought up securities at a government debt auction early in the week, then consumer confidence and new home sales were down.  But then again, existing home sales showed strong gains, jumping up 9.4 percent in September from the previous month.

And although it is anyone’s guess what will happen to interest rates in the coming week and month, by historical standards there is no doubt that rates are fabulously low. If you are a potential homebuyer sitting on the fence, pre-boom home prices coupled with today’s rates make now a really good time to buy.

International credit ratings agency Fitch Ratings improved its outlook on the U.S. housing market in its recent “Chalk Line” report, but that’s not saying much considering it still expects housing starts and new home sales to continue to plunge downward through the end of the year.

“During the first 12-15 months off the bottom, the housing recovery may appear jaw-toothed as substantial foreclosures now in the pipeline surface as distressed sales, while meaningful new foreclosures arise from Alt-A and option adjustable-rate mortgage resets,” wrote managing director and lead U.S. homebuilding analyst Bob Curran.

The new forecast includes a 36.7 percent decrease in total housing starts in 2009, up from a previous prediction of 43.3 percent. The new projection calls for a 21 percent decline in new home sales, up from the earlier forecast of 30 percent. And existing home sales are now expected to move up 1.1 percent this year to almost 5 million, a change from Fitch’s last prediction of flat sales.

Why the more “upbeat” outlook? Fitch says it took into consideration increased affordability, a slowing of builder cancellation rates, shrunken builder inventories, an uptick in consumer confidence and an increased demand for new homes from those who have been sitting on the sidelines.

Why are the numbers still trending downward though? According to Fitch there is still a great risk of a new wave of foreclosures on the way, home prices continue to decline, and the first-time homebuyers tax credit that has artificially inflated sales for the past two quarters is due to expire in December.

“There is also a negative psychology that remains relatively pervasive. For many, the expectation or fear is that home prices are vulnerable to further declines and buying now might be a mistake,” Curran wrote. “This psychology applies to all types of buyers but especially applies to trade-up and second-home buyers.”

So, we may be in for many more ups and downs across the market for at least the foreseeable future!

Rates on 30-year fixed rate mortgages dropped below 5 percent last week and continued to fall this week, creating a dramatic stir in refinancing.

According to mortgage finance company Freddie Mac, the average rate on a 30-year FRM sank to 4.87 percent, excluding points, during the week ending Thursday, down from 4.94 percent. The 15-year FRM rate also dropped, falling to 4.33 percent from 4.36 percent, and the one-year adjustable rate mortgage averaged 4.53 percent, up from 4.49 percent.

There seems to be something special about long-term rates under 5 percent, as refinance activity has surged up 38 percent during the three weeks ending October 2 when rates were below that threshold. The same thing happened in May when rates were under 5 percent for several weeks. Some estimate that refinance requests rose by as much as 30 percent at that time.

It must be something about hearing that rates are near “record lows” that stirs homeowners to take the initiative to refinance into better loan terms and lower monthly payments.

“The wave of homeowners taking advantage of low rates by refinancing is a smart move on the individual level, and it’s possible these refinances could help the housing market in the long term,” said Stan Humphries, chief economist at Zillow.com, based in Seattle, Washington as quoted in a Reuters article. “If homeowners are getting out of risky mortgage products and into more traditional products, that could help stem future foreclosures marginally.”

The rates are still only helpful for those who qualify for refinances, and approximately one in four homeowners today are underwater in their mortgages, often keeping them from taking advantage of the falling rates.

Home purchases do not seem to be as affected by the drop in rates, as they only rose 13.2 percent in the latest week according to the Mortgage Bankers Association.

Freddie Mac released the results of its weekly mortgage interest rate survey today and it turns out long-term rates are down again. The average rate on a 30-year fixed rate mortgage slipped down to 4.80 percent, excluding points, during the week ended April 23, from 4.82 percent.

Rates on 15-year FRM loans were unchanged, but rates on one-year adjustable rate mortgages are now higher than 30-year FRM loans at 4.82 percent, a historical first in the Freddie Mac survey.

Here’s what Freddie Mac’s vice president and chief economist, Frank Nothaft had to say about the mortgage situation.

“Interest rates for 1-year ARMs exceeded those for 30-year fixed-rate mortgages over the last two weeks; this is the first time this has happened since Freddie Mac began collecting data for ARMs in January 1984. The housing market is showing further signs of possible improvement. House prices rose for the second consecutive month in February, the first back-to-back increase since April 2007, according to the Federal Housing Finance Agency.”

Yet for many people, low interest rates may not be enough or even the right tool for helping the housing market stabilize.

According to a comment in response to a posting by Peter Boockvar on  The Big Picture blog  the real issue at hand is the new, stricter lending standards. There are fewer and fewer loan programs available, especially for those with less than perfect credit. And while this means low interest rates are of little use to many potential homebuyers when they don’t end up qualifying, as commenter CPJ13 says, maybe its for the best.

…Some of the criticism for why housing hasn’t rebounded is misguided (”rates need to be lower and more affordable”, “houses need to come down in price”, etc.).

The real reason that we’re correcting so sharply - and will continue to for a long time - is that ‘historically normal’ guidelines have been reapplied to the home-buying process. Everyone got so drunk on cheap, free and loose credit that once the spigot is shut off to all but those who ’should’ be buying houses, it’s a painful process and we’re not nearly through it.

People now have to think about SAVING for a down payment; they have to consider their overall credit (late on credit cards? collections? Etc.)…

Simply stat[ed]… it’s going to take a loooong time for housing to recover if we stick to currently guidelines and standards. It’s a good thing - but yes, it will be painful…

Long-term mortgage interest rates fell in the latest week, according to Freddie Mac, one of the nation’s largest mortgage companies, remaining close to historic lows.

“Mortgage rates on fixed-rate loans and some ARM products eased this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The housing industry is starting to exhibit some positive signs, albeit scarce and too early to tell how permanent.”

Nothaft continued, “In its April 15th regional economic report, the Federal Reserve reported that better-than-expected buyer traffic led to a scattered pickup in home sales in a number of its Districts over the 6-week period ending on April 6th. Factors such as homebuyer tax credits, low mortgage rates, and more affordable prices were cited as leading to more potential buyers. This may have added to the rise in homebuilder confidence in April, which rose to the highest level in six months, according to the National Association of Home Builders. Moreover, confidence increased in each of the four regions, led by the Northeast and Midwest.”

The average rate on a 30-year fixed rate mortgage (FRM) decreased to 4.82 percent, excluding fees in the week ended April 16, 2009, from 4.87 percent the previous week. One year ago, the average rate on a 30-year FRM was 5.88 percent.

Rates on 15-year fixed rate loans averaged 4.48 percent, down from 4.54 percent the week before. The current average rate is the lowest on record since the beginning of the Freddie Mac survey in August 1991. Last year at this time, the average rate was 5.40 percent.

And interest rates on one-year adjustable rate mortgages rose to 4.91 percent, an increase from 4.83 percent one week earlier. During the same week of April 2008, the average rate was 5.10 percent.

Interest rates grew on long-term U.S. mortgage rates during the latest week according to mortgage company Freddie Mac Thursday, representing the first increase in over a month.

“Mortgage rates rose slightly this week but still remained historically low,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Interest rates for 30-year fixed-rate mortgages have averaged below 5.0 percent for the last four weeks, which should keep homeowner affordability at record levels.

“Given these low rates, housing demand has strengthened. Conventional mortgage applications both for refinancing and for home purchases have increased over the past five consecutive weeks ending April 3. Since the end of February, applications for home purchases were up about 22 percent and nearly 129 percent for refinancing, according to the Mortgage Bankers Association.”

The average national rate on a 30-year fixed rate mortgage rose to 4.87 percent, excluding fees, during the week ended April 9, 2009, jumping up from 4.78 percent the previous week. One year earlier the average rate was more than a full percentage point higher at 5.88 percent.

Interest rates on 15-year fixed rate loans averaged 4.54 percent, inching up from 4.52 percent the week before. Last year at this year, the average rate on a 15-year FRM was 5.42 percent.

One-year Treasury indexed adjustable rate mortgages carried an average rate of 4.83 percent, an increase from 4.75 percent one week earlier. The current average rate is at its lowest since the week of September 29, 2005, a three and a half year low. During this week of 2008, the average rate was 5.18 percent.

While some analysts and legislators had been talking about mortgage interest rates moving down close to the 4 percent range this year, economists are now starting to believe that kind of drop is unlikely anytime soon, as rates have not yet fallen more than a quarter percentage point below five percent to date.

Although economic reports were mixed this week, mortgage giant Freddie Mac announced that interest rates on long-term mortgages had dropped to a new all-time low in the latest week.

“Mortgage rates followed other interest rates lower this week amid reports of slower economic growth” said Frank Nothaft, Freddie Mac vice president and chief economist. “The final estimate of economic growth in the fourth quarter was revised lower and personal incomes fell 0.2 percent in February, below the market consensus.

“On a positive note, pending existing home sales rose 2.1 percent in February, marking the second increase in three months as potential homebuyers are taking advantage of historically low mortgage rates and falling home prices. Serving as a spur to sales, housing affordability reached an all-time high in February 2009 since the series’ inception in 1971, according to the National Association of Realtors. By region, sales surged by nearly a third in the Northeast and Midwest, but fell in the West.”

The average rate on a 30-year fixed rate mortgage (FRM) decreased to 4.78 percent, excluding fees, during the week ended April 2, 2009, from 4.85 percent. The current rate is the lowest in the 30-year history of the Freddie Mac weekly survey. The average interest rate one year ago was 5.88 percent.

Rates on 15-year FRM loans also declined in the latest week, dropping to 4.52 percent, also a record low for the survey, down from 4.58 percent the previous week. Last year at this time, the average rate was 5.42 percent.

One-year adjustable rate mortgages carried an average rate of 4.75 percent, a drop from 4.85 percent the week before. During the same week of 2008, the average interest rate was 5.19 percent. The current rate represents a four-and-a-half year low.

After the Federal Reserve committed to buy up even more toxic mortgages at its bi-monthly meeting, interest rates on long-term U.S. mortgages dipped back down under the 5 percent mark again, according to mortgage giant Freddie Mac Thursday.

“Following the March 18th Federal Reserve monetary policy statement, which announced further spending initiatives on financial assets, long-term bond yields plummeted,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Yields on 10-year Treasury bonds fell by about a half percentage point after the announcement, marking the largest one-day decline since October 20, 1987.”

The average rate on a 30-year fixed rate loan dropped to 4.98 percent, excluding fees, during the week ended March 19, 2009, down from 5.03 percent the previous week. The current rate is just slightly above the all-time low from the week of January 15, 2009 when it hit 4.96 percent. One year ago, the average rate was 5.87 percent.

“Long-term mortgages followed bond yields lower for the second week as reports of slower industrial production suggested that business spending might ease this year,” Nothaft also pointed out. “Output at factories declined for the fourth consecutive month by 1.4 percent in February driven by declines in computers and machinery and experienced the largest 12-month drop since June 1975. In addition, factory capacity utilization slumped to 70.9 percent, matching the lowest rate since records began in January 1967.

Rates on the 15-year fixed rate mortgage loan fell to 4.61 percent, from 4.64 one week earlier. According to Freddie Mac records, the current rate is an almost six year low. Last year at this time, the average rate was 5.27 percent.

Interest rates on one-year adjustable rate mortgages however, increased in the latest week, growing to 4.91 percent from 4.80 percent. During the same week of 2008, the average rate was 5.15 percent.

Following reports of weak economic growth, rates on long-term mortgage loans fell in the latest week, according to mortgage financier Freddie Mac Thursday.

“Mortgage rates followed bond yields higher this week following reports of record continuing jobless claims and a downward revision in economic growth in the fourth quarter of 2008,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Real Gross Domestic Product was revised from a 3.8 percent decline to a 6.2 percent drop in the fourth quarter mostly led by a 4.3 percent fall in consumer spending, which was the largest decrease since the second quarter of 1980.”

The average rate on a 30-year fixed rate mortgage dropped to 5.03 percent, excluding fees, during the week ended March 12, 2009, down from 5.15 percent the previous week. One year ago, the average rate was 6.13 percent.

Rates on 15-year fixed rate home loans averaged 4.64 percent, a decrease from 4.72 percent the week before. Last year at this time, the average rate was 5.60 percent.

The average interest rate on a one-year adjustable rate mortgage fell to 4.80 percent, doen from 4.86 percent last week. During the same week of 2008, the average rate was 5.14 percent.

In addition to the reports of weak GDP figures, Nothaft commented that negative housing data also had a downward effect on rates this week.
“The housing market continues to slow as well,” he said. “New home sales fell 10.2 percent in January to the slowest pace since records began in January 1963 while pending existing home sales slowed by 7.7 percent, the weakest since the series began in January 2001. More recently the Federal Reserve noted in its March 4th regional economic report that residential real estate markets remained in the doldrums in most areas, with only scattered, very tentative signs of stabilization.”

Yet there may be a silver lining to the gloomy economic news. “Given the recent historically low mortgage rates, homeowners have a strong incentive to try and refinance,” Nothaft said.

For the third straight week, long-term U.S. mortgage interest rates continued to climb, spurred by higher bond yields and reports of a slowing economy, according to mortgage company Freddie Mac Thursday.

The average rate on a 30-year fixed rate home loan grew to 5.15 percent, excluding fees, during the week ended March 5, 2009, up from 5.07 percent the previous week. The current rate is still very low by historical standards though. One year ago, the average rate was almost an entire percentage point higher at 6.03 percent.

“Mortgage rates followed bond yields higher this week following reports of record continuing jobless claims and a downward revision in economic growth in the fourth quarter of 2008,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Real Gross Domestic Product was revised from a 3.8 percent decline to a 6.2 percent drop in the fourth quarter mostly led by a 4.3 percent fall in consumer spending, which was the largest decrease since the second quarter of 1980.”

“The housing market continues to slow as well,” Nothaft added. “New home sales fell 10.2 percent in January to the slowest pace since records began in January 1963 while pending existing home sales slowed by 7.7 percent, the weakest since the series began in January 2001. More recently the Federal Reserve noted in its March 4th regional economic report that residential real estate markets remained in the doldrums in most areas, with only scattered, very tentative signs of stabilization.”

Rates on other common mortgage loans also rose in the latest week, with the average interest rate on a 15-year fixed rate loan increasing to 4.72 percent, up from 4.68 percent one week earlier. Last year at this time, the average rate was 5.47 percent.

On-year adjustable rate mortgages (ARMs) rose to 4.86 percent from 4.81 percent. During the same week of March 2008, the average rate was 4.94 percent.