Mortgage rates fall to record low again, spur refinancing

By Palm Beach Business.com

DELRAY BEACH — Some day, mortgage rates will rise. Some day, mortgage rates won’t set another record low. But not this week, as continued doubts about the strength of the economy once again pushed rates south.

Palm Beach Business.com's South Florida Survey found the 30-year fixed-rate mortgage dropping to 4.60 with 0.71 point from 4.64 two weeks ago. BankAtlantic had the lowest posted rate among major South Florida lenders, at 4.41 percent, with one point. PNC had the lowest annual percentage rate at 4.083 percent.

Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed-rate mortgage averaging 4.57 percent with an average 0.7 point, down from last week’s 4.58 percent. It’s the third week in a row that rates hit all-time low.

Meanwhile, Bankrate.com’s national mortgage survey put the 30-year at 4.74 percent with 0.39 point, down from 4.75 percent a week earlier.

“With mortgage rates falling to historic lows, refinance activity has been strong over the past three months,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The Bureau of Economic Analysis reported that the effective mortgage rate of all loans outstanding was just below six percent in the first quarter of 2010, the lowest since the series began in 1977. Since the start of the second quarter, two out of three mortgage applications on average were for refinancing, according the Mortgage Bankers Association.”

Not all mortgage rates fell. The 15-year mortgage rose to 4.07 percent with an average 0.7 point from last week’s 4.04 percent, according to Freddie Mac.

Bankrate’s survey put it at 4.22 percent with 0.36 percent, up from last week’s 4.20 percent.

The 5-year adjustable-rate mortgage averaged 3.75 percent with 0.7 point, down from last week’s 3.79 percent, according to Freddie Mac. Bankrate put it at 4.06 percent with 0.30 percent, down from 4.07 percent a week ago.

Bankrate’s panel of mortgage experts sees rates remaining right where they are over the next week; 56 percent say rates will hold, while a third say rates will rise. Only 11 percent believe rates will continue to drop.