According to the Primary Mortgage Market Survey the national average for the 30 year fixed interest rate has dipped below 4%.
The average 30 year rate is 3.94% with .8% in fees and points.
This rate sets a new record low for interest rates. The first week of October in 2010 the average 30 year rate was 4.27%.
What does this mean for borrowers?
Now is an excellent time to be able to purchase a house, or if you have equity to refinance. There are reports that some borrowers are still on the fence, wondering if rates are going to bottom out anymore.
Last year there were the same concerns. A common question we got was, “Are Mortgage Rates Going to Go Up in 2011?”
At the end of 2010 mortgage rates started to rise. It looked like rates in 2011 would go up and stay up. In February rates hit 5%, but sense then have again declined to the current record low.
Investors are still extremely cautions, the economy remains in shambles, there is a threat of a second recession, unemployment is still very high, the housing market has not turned around. All of these factors are contributing to the low interest rates.
Are the low rates going to stick around?
Yes and no. In there short term there is no economic forecast that would suggest rates will increase “over night”. Once mortgage rates increase for good it will most likely be a slow process following the recovery of our economy and the housing market.
Should I buy or refinance?
Yes. Record low housing prices and record low rates is a recipe for a great home with a low payment. Even if house prices stay low for a few more years it is still an incredible opportunity to purchase a home. In fact never in the last 50 plus years have Americans had the opportunity to get locked into such an incredibly low 30 year interest rate.