Consumers continue to have the most affordable homebuying conditions ever witnessed in the U.S., as Freddie Mac reports the average rates for short- and long-term mortgage products set or were at record lows the week before Christmas.
According to the government-sponsored enterprise's Primary Mortgage Market Survey, the average rate for a 30-year fixed-rate home loan dropped to a new all-time low during the week ending December 22, falling to 3.91 percent.
Additionally, the average for 15-year FRMs remained at the same rate from the week before of 3.21 percent. Rates for five- and one-year Tresury-indexed adjustable-rate loans also dipped marginally from a week earlier.
"Rates on 30-year fixed mortgages have been at or below 4 percent for the last eight weeks and now are almost 0.9 percentage points below where they were at the beginning of the year, which means that today's homebuyers are paying over $1,200 less per year on a $200,000 loan," said Frank Nothaft, vice president and chief economist for Freddie. "This greater affordability helped push existing home sales higher for the second consecutive month in November to an annualized pace of 4.42 million, the most since January."
In addition to historic-low interest rates helping prospective home buyers and current homeowners, loan modification programs have helped many refinance their mortgages during the third quarter.
A report by the Office of the Comptroller of the Currency indicates delinquencies remained historically high during the three-month period, but were stable, thanks in large part to programs such as the Home Affordable Modification Program.
Bruce Krueger, an official with the OCC, told Reuters that he expects toreclosure activity to remain stable or lessen during the next few quarters, which could stabilize the long-distressed real estate market.
"I think what you are seeing is what would be considered a more expected level, a more normalized level and I would expect that to continue going forward so long as we have this pipeline of serious delinquent mortgages out there," he told the news source.