High affordability has prompted a large amount of activity in the national housing market in combination with improving economic factors throughout much of the third and fourth quarters of the year. In the most recent Primary Mortgage Market Survey from Freddie Mac, it was revealed that mortgage rates have remained near record lows for the final full week of 2012.
Data for the week ending December 27 showed the average rate for 30-year fixed-rate mortgages was 3.35 percent, down from the week before’s average of 3.37 percent but still lower than a year earlier, when the average was 3.95 percent.
Additionally, the average rate for 15-year FRMs continued to linger near lows set a month ago, and remained unchanged from last week’s 2.65 percent average. This is still markedly lower than the average rate from this time a year ago, when it was 3.24 percent.
ARMs still growing, FRMs to stay below 4 percent
While averages for FRMs have remained near historically low levels, average rates for ARMs have been increasing to levels seen last year. According to the survey, the average rate for 5-year ARMs for the last week of December was 2.7 percent, down from the previous week’s average of 2.71 percent but still closer to last year’s average of 2.88 percent.
"Mortgage rates ended this year near record lows,” said Frank Nothaft, vice president and chief economist of the agency. “The 30-year fixed-rate mortgage averaged 3.66 percent for 2012, the lowest annual average in at least 65 years. Rates on 30-year fixed mortgages were nearly 0.6 percentage points below that of the beginning of the year, which translates into an interest payment savings of nearly $98,600 over the life of a $200,000 loan. Moreover, opting for a 15-year fixed mortgage at today's rates, a homeowner could save an additional $138,400 in interest payments."
Prospective buyers in search of high affordability are urged to consider beginning their home search soon, as home prices are expected to steadily increase in 2013. However, Freddie Mac’s recently released outlook for December revealed economists say mortgage rates for FRMs will likely stay below 4 percent throughout the coming year.