Mischer News

According to the Associated Press and Freddie Mac, mortgage rates on a 30-year fixed loan have fallen dangerously close this week to the all-time low.

Mortgage finance company Freddie Mac states that “the average rate sank to 4.72%, down from 4.79% last week. It was just above the record of 4.71 set last December.” They go on to state that “the average rate on a 15-year fixed-rate mortgage hit 4.17%, down from 4.2% last week and the lowest on records dating back to August 1991.”

Falling rates are thought to be the result of last years Federal Reserve campaign designed to “reduce borrowing costs for consumers [and to] push rates down to extraordinarily low levels.” Although rates were speculated to rise after the campaign, which ended this spring, rates have unexpectedly fallen over the past two months instead.

Guarded investors, still shell shocked from the European debt crisis and turbulent stock market, have shifted their money into the more stable U.S. Treasury bonds, which in turn have pushed down interest rates, or the yield, on U.S. Treasury debt. Fixed mortgage rates have a tendency to follow that yield. Other factors that affect the bond yield include, but are not limited to, the national employment report.

Only time will tell if these historically low interest rates are enough to revive the housing market, but it is definitely good news for customers intending to purchase a new home this summer!