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Freddie Mac, Bankrate: Rates drop to record low (again)

By Palm Beach Business.com

DELRAY BEACH — After moving substantially higher a week ago, mortgage rates this week did what they’ve done most of 2012 — set yet another record low.

Freddie Mac’s Primary Mortgage Market Survey found the 30-year fixed-rate mortgage averaging 3.87 percent with 0.8 point, down from 3.87 percent a week ago.

Bankrate’s national mortgage survey similarly found the 30-year smashing through to a new record low, 4.12 percent with 0.29 point, from 4.25 percent a week ago.

The two surveys had differing takes on what caused the downward movement, however. Frank Nothaft, chief economist at Freddie Mac, cited disappointing economic data, including a below-projected gross domestic product.

“Most mortgage rates eased to all-time record lows this week as fourth quarter growth in the economy fell short of market projections,” Nothaft said. T”he Gross Domestic Product rose 2.8 percent in the final three months of 2011, below the market consensus forecast of 3.0 percent, while consumer spending in December was flat.

“One bright spot, however, was that fixed residential investment increased for the third consecutive quarter and residential construction spending rebounded in December, rising 0.7 percent."

Bankrate cited Fed Chairman Ben Bernanke’s pledge to keep short-term interest rates low through 2014. That not only knocked down rates this week, but should keep them low for the foreseeable future.

The 15-year fixed-rate also fell to record lows in both surveys, to 3.14 percent with 0.8 point from 3.24 percent a week ago, according to Freddie Mac, and to 3.34 percent with 0.30 point from 3.45 percent a week ago, according to Bankrate.

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