Mortgage Rates Down

December 11, 2007

As we move into the last month of 2007, mortgage interest rates are continuing to decrease. They are now at the lowest point in more than two years, thus opening a bit wider the door of opportunity for home buyers.

The average rate for a 30-year fixed-rate mortgage is now down to 6.10 percent, with 0.5 points (fees), according to Freddie Mac, a major government sponsored buyer of existing mortgages. It has not been this low since mid-October, 2005. Last year at this time the rate was 6.14 percent.

The 15-year, fixed-rate mortgage has an average rate of 5.73 percent, with 0.5 points. A year ago this rate was 5.87 percent. It’s now at the lowest rate since January of last year. This is a popular option for many homeowners who are now refinancing their mortgage. The 5-year hybrid adjustable-rate mortgage (ARM) is still popular. Its rate now averages 5.86 percent. A year ago it was 5.95 percent.

"Interest rates for U.S. Treasury securities are drifting lower over market concerns that the housing slump and stress in credit markets could slow future economic growth. As a result, interest rates are slipping lower," said Frank Nothaft, Freddie Mac’s chief economist. With Federal Reserve chairman Ben Bernanke hinting that yet another rate cut may be needed to bolster the economy, prospects look good for continuing declines in mortgage rates.

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