Mortgage rates hit record low as mixed home-sale data emerge

Rate on 30-year fixed mortgage hits 3.75% as April's pending-home-sales index shows annual gain — but worst monthly drop in a year.

By Tony at MSN Real Estate May 31, 2012 10:41AM

© Alex Stojanov/AlamyAnother month, another set of inconclusive housing data.


Let's start with the latest: Freddie Mac announced today that the average interest rate on a 30-year fixed loan fell to 3.75% for the week from 3.78% the week prior. This marks the sixth-straight week in which that rate has touched a record low. It last ticked up for the week ending April 24.


Meanwhile, the average rate on a 15-year fixed-rate loan hit 2.97% — the first time it has been below 3% since Freddie Mac started keeping track in 1991, according to MarketWatch.


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Regionally, the average 30-year rate was highest in the Southwest, at 3.79%, and lowest in the West, at 3.7%. The same was true for 15-year rates, with the Southwest coming in at 3.04% and the West at 2.94%.


Of course, the question continues to be: Can anyone score a loan or refinance at these minuscule rates?

Small banks continue to be an option for borrowers and potential borrowers turned down by larger lenders. The Mortgage Bankers Association also just increased its mortgage-origination estimate for the year by more than $200 billion, to $128 trillion. The increased estimate is because of more refinances, and the association now expects refis to account for $870 billion of this year's total, about the same as in 2011.


As for homeowners, they may still be waiting things out. The MBA reported that mortgage applications were down 1.3% last week, partially because of the Memorial Day holiday, according to the Orange County Register.

The National Association of Realtors announced yesterday that pending home sales, or homes under contract that have not closed, were down 5.5% in April from March — the biggest drop in a year. This sale index is considered a barometer for sale activity in coming months, and the drop came after three consecutive months of gains.

The Pending Home Sales Index did register a 14.4% gain from April 2011, however.


— Tony Stasiek is a producer/editor at MSN Real Estate.


Jun 5, 2012 10:24AM

Idontneeddr.... How is it President Obama's fault?

 Why don't you put the blame where it is due on the do nothing T'ripublicondinos and their tripping. Wasn't Romney's solution to the forclosure/housing problem was that the housing market should be allowed to hit bottom, to let investors buy up these properties (no doubt for pennies on the dollar) and fix them up and rent them back to those losing their homes?

So many of these housing help programs yet these T'rip folks find ways to destabilize them so that they do not work for the masses, because the real reason is that the financial folks -i.e. middlemen as these are freddie and fannie guaranteed loans-  do not want to actually lower the interest rate for the homeowners? In a year or two many of these loans will be bundled and sold on to them and they would want the higher interest rate?

It appears even more so that there is this  push or trying to force even the most responsible of homeowners -who had put their 20 odd % down and even paid down the principal and thus did not have to pay any mortgage insurance- into having  that high cost of mortgage insurance added to the mortgage payment no matter what. 

In many instances one is either going to have to take money to the table to pay all the closing costs - as oftentimes there is not much equity left under these circumastance- with appraisals being as low as they are - thus the closing costs cannot be wrapped into the loan,-  at a refi and still have that added monthly cost of mortgage insurance which oftentimes still make the monthly mortgage payment still awfully high no matter how low the interest rate it appears.

As the saying goes....6 of one ...1/2 a dozen of the other... LOL

Blame Pres Obama all you want for the mess....he did not cause it, but is trying to do something about it and is being blocked by the plutocratism a la  T'ripublicondinos. 

 Amazingly it seems that there are no po teaparty folks or po repubicondinos in the USA populace. They are so flushed in the pockets they have no need to be stressing or guessing re their abodes etc.. LOL 

If you are having 'difficulties' then you must be an independent or a democrat it would seem... Condidering the amount of folks having 'difficulties' especially since the 2008 implosion,  this country  must be chocker block full of democrats and independents then.LOL  Who knew? LOLLLL



May 31, 2012 5:50PM

"Mortgage rates hit record low"


No way, OMG!  Wow!  Just heard this!  Oh, wait, same headline for the last 4 years.  Yawn.

May 31, 2012 5:44PM

Can you say "recession"?  Barry's printing press can't stop the mess before 11/12.  C'ya!

May 31, 2012 5:44PM

Low interest rates, equal cheap money. No one has a crystal ball, so we can't predict what will happen in the future. I say if you are in a secure job and plan on staying in the same city, take advantage of the cheap interest rates with a 15 year loan and buy less than you can afford. Then it doesn't matter what housing prices do, either way in 15 years you no longer pay rent or mortgage. You can wait until housing starts going up again (whenever that is) but rates will climb with it. You still have to make monthly payments on housing (renting) so you might as well build equity with it. Umm... This idea doesn't really apply to those of you that live in places where the housing market went to rediculous levels (i.e. California).

May 31, 2012 5:15PM
I will stick with my 4.75 rate on a 15 year loan. It is not worth the hassles of refi to get a 2.97 rate.
May 31, 2012 4:57PM

3.75% lending rate on $ 300,000

on a house that use to sell for $150,000

20 years ago


Why are homes the only item that the older and more worn out it gets

 The more it cost ?


Yea Right ! 

What a Bargin *

May 31, 2012 3:55PM
We paid 8,5% interest on our house in 1976, We easily paid it off in 25 years. I don't understand what the big fuss is about with mortgage interest rates. Those of us with cash (not much) are sitting on the sidelines and not investing because inflation combined with low yield will only provide zero income. It is not good news when interest rates drop further and further.
May 31, 2012 3:19PM
What good is it When folks are either Out of Work, Underwater in Debt or have a 4F Credit Score?
Nothing More than BANKERS TEA for their Shylock Friends!

THIS is a Symptom of a Sick Economy NOT A CAUSE --Stupid!

May 31, 2012 3:02PM
I might buy a house when interest rates get into the negative. Until then, it's still a shell game scam.
May 31, 2012 3:00PM

This would be good news if the banks were lending to mainstream Americans who really need the loans to buy homes or refinance existing loans.  Unfortunately the only ones benefiting from this low interest are the wealthy who are buying houses on credit that they could afford to buy outright.  It is actually cheaper for them to use the credit and invest their money in high interest bearing investiments. 


I just tried to refi my open line of credit on my home and convert it to a 20 yr fixed mortgage but got denied because my home was a manufactured unit.  However that same bank gave me the original line of credit in the first place.  I was told that they had tightened up on who qualifies for the loans so suddenly I no longer qualified because of my type of housing.  LOL  

May 31, 2012 2:42PM
I suppose the low rates are only for the rich like everything else.
May 31, 2012 2:26PM
yep I've been paying on a home for 8 years at 6% and no one will qualify me for a cheaper mortgage rate what's wrong with that picture.
May 31, 2012 1:54PM
Interest rates don't matter if you don't have a job.
May 31, 2012 1:45PM
Ok, if you house is no worth what you paid, you have made a bad choice. Fannie,Freddie, HUD, and VA are proping up the housing market by offering loans on overpriced houses. Don't listen to Realtors, look at the facts. Housing will need to drop 15 to 30%. The 695 trillion dollas sold in derivitives over the past 10 years  have come to roost. If you say 10% of all house foreclosed, that is 69.5 trillion missing. Get a grip people, the ATM house has vanished, rent for 10 years.

May 31, 2012 1:42PM
The middle class has been eaten away like a virus, unprotected.. The only ones who make it are the ones who can hide their money..Thanks Obama!
May 31, 2012 1:34PM

To be blunt.... if you cannot get a refi because your house is NOT underwater and because you are still trying to make your payments what is the point if the interest rate continues to fall. Freddie and fannie better get their act together as they are guarantors of these refi etc loans. If they do not loosen up then these loans do not go through as there is always some glitch or other why the person does not qualify no matter if they qualify on the Freddie/fannie online questioneer. I know that may sound odd but that is what some folks are finding.   

You go through appraisal and find that your house that you put more than the 20% down on and have not missed any payments and have even paid down your principal amount and never had to pay mortgage insurance, is just above water enough not to qualify under one of the underwater plans, but too low to qualify for a regular refi because your house apraises at the whatev the last house i.e. forclosure or shortsale in your neighborhood sold for.  

As the song goes..... something gotta give....

May 31, 2012 1:20PM
rates could be at 1% but if no one can get loan what good is it!!!
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