Mortgage Rates Continue to Plummet
Posted on Jul 12, 2010
According to mortgage giant, Freddie Mac, mortgage rates on a 30 year fixed mortgage fell again this week to a record low of 4.57%. This marks the lowest rate ever recorded by Freddie Mac, who began keeping track of mortgage rates in 1971.
Rates started dropping when the FED began pumping $1.25 billion into mortgage backed securities last year in an effort to keep the rates at or around 5%. The program expired March 30th this year, prompting the concern of economists. As mortgage rates are closely tied in with long term Treasury bonds, when the European Debt Crisis reared its ugly head, investors were forced to shift their money into safer US Treasury Bonds, which has continued to keep the mortgage rates low.
The low rates are attractive to those looking to refinance as well as potential homebuyers. According to Frank Nothaft, Vice President and chief economist of Freddie Mac stated, "With mortgage rates falling to historic lows, refinance activity has been strong over the past three months."
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