Lower Mortgage Rates Drive Existing Homes Sales Higher

Mortgage rates have hit a three month low this past week, breaking the see-saw trend of mortgage rates going higher one week than falling lower the next week. The low current mortgage rates have also driven home sales to their higher point since November 2005 according to the National Association of Realtors.

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The three month low in mortgage rates has been brought on by a decline in U.S. Treasury prices and lower longer term interest rates.  Freddie’s Primary Mortgage Market Survey reported mortgage rates on 30-year and 15-year fixed-rate mortgages fell to the lowest level since the end of May 2009. Home mortgage rates on 5/1 hybrid ARMs fell to levels not seen since January 2005.

Today’s mortgage rates are helping the housing market recover. The NAR’s monthly sales gain was the largest on record for existing home sales dating back to 1999.

Current Mortgage Rates

The average rate on a fixed 30-year conventional mortgage is nearing 5.00 percent at 5.12 percent for the week ending yesterday, with an average of 0.7 discount points, down from the prior week’s average rate of 5.29 percent.

Average mortgage rates on 15-year fixed rate mortgages are coming back down to 4.50 percent, today’s mortgage rate for a 15-year mortgage is at 4.56 percent for the week ending August 20, 2009 with average discount points of 0.7. The previous week’s average mortgage rate for a 15-year mortgage was 4.68 percent.

Adjustable Rate Mortgages

The average a 5-year adjustable mortgage rate is at 4.57 percent for the week ending yesterday, down from last week’s average 5-year adjustable rate of 4.75 percent. Last year that this time 5-year adjustable mortgage rates were around 6.00 percent. Average discount points are 0.6.

One-year adjustable rate mortgages also fell this week to 4.69 percent, down from the prior week’s average rate of 4.72 percent with average discount points of 0.5 percent.

Jumbo Rate Mortgages

Freddie Mac’s weekly PMMS survey doesn’t include jumbo mortgage rates because Freddie Mac only reports on conforming mortgages it purchases from banks. MonitorBankRates.com has free jumbo mortgage rate tables and conforming mortgage rate tables in your zip code.

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