Bankrate, Freddie Mac see mortgage rates hitting lows

By Palm Beach Business.com

DELRAY BEACH — Mortgage rates continue remain seriously low, with the 30-year and 15-year tying or surpassing  records set earlier this year as concerns over the European debt crisis and other news overshadowed positive domestic economic reports.

Despite the cheap money, the housing market remains moribund regardless.

Freddie Mac’s Primary Mortgage Market Survey found the 30-year fixed-rate mortgage dropping to 3.94 percent with 0.8 point from 3.99 percent a week ago. That ties the record low  set the week of October 6. A year ago, the rate sat at 4.83 percent, still low by historical standards, but nearly a point higher than the present.

The 15-year fell to 3.21 percent with 0.8 point from 3.27 percent a week ago, according to Freddie Mac. That breaks the record also set the week of October 6.

"Mortgage rates were at or near all-time record lows this week amid a rough environment for housing,” Freddie Mac Chief Economist Frank Nothaft said.  “In its Dec. 13th monetary policy announcement, the Federal Reserve reiterated the housing market remains depressed. Over the first nine months of 2011, households lost almost $400 billion in property values, which contributed to a $1.4 trillion reduction in overall net worth. In addition, serious delinquency rates on mortgages increased slightly between June 30 and September 30 of the year, breaking a six-quarter consecutive decline, according to the Mortgage Bankers Association."

Bankrate’s national mortgage survey similarly found mortgage dipping to new lows. The 30-year fell to 4.19 percent with 0.32 point from 4.24 percent a week ago. The 15-year fell to 3.42 percent with 0.33 point from 3.48 percent a week ago.

Bankrate cited political wrangling about the payroll tax cut extension, and the lack of stimulus from the Federal Reserve as contributing to the drop in mortgage rates along with the European debt saga.