According to a report by Freddie Mac this past Thursday, average interest rates on 30-year fixed-rate home loans dropped this week to 3.91%.
It was the fifth consecutive week that the 30-year fixed loan was below 4.00%.
According to Freddie Mac, the average 30-year, fixed-rate mortgage declined from last week’s 3.95%. Average interest rates on 15-year, fixed rate home loans were also down slightly to 3.23%, after last week’s 3.24% rate. A year ago, the interest rate on the 15-year loan was nearly a point higher at 4.13%.
Frank Nothaft, Freddie Mac vice president and chief economist, states: ”Fixed mortgage rates started the year a little lower this week just as recent data reports indicate the housing market and manufacturing industry are showing signs of improvement.”
According to Freddie Mac, total upfront costs this week for both the 30-year and 15-year, fixed-rate loans averaged .8% of the price of the home being bought. The buyers may also pay closing costs, which are not included in the survey.
However, many buyers won’t get Freddie Mac’s low average rates, Money magazine reported in its December issue. One of the reasons is that Freddie Mac’s low rates require high credit scores and down payments of 20% or more. Freddie Mac spokesman Wandler goes on further to add that Freddie Mac’s average low rates also require more upfront fees than what some consumers are used to paying.