According to mortgage giant Freddie Mac, the average rate on the 30-year fell to 3.34%, 0.06 percentage point lower than last week. The 15 year fell 0.04 percentage point to 2.65%
The new lows reflect increased demand for government bonds, according to Keith Gumbinger, of HSH.com, a mortgage information company.
"It's a flight to quality," he said. "You may have noticed that stocks sold off last week after the election."
When investors turn away from stocks, they often park their cash in Treasurys, and the added demand brings down bond yields. Mortgage rates tend to track those yields down.
A secondary factor, said Gumbinger, was a drop in demand for loans, some of which was related to Superstorm Sandy, according to the Mortgage Bankers Association.
"[The storm] had a significant impact on application volumes on the East Coast," said Mike Fratantoni, MBA's Vice President of Research and Economics. "Applications fell more than 60% compared to the prior week in New Jersey, almost 50% in New York and nearly 40% in Connecticut."
Record low rates have made mortgage borrowing cheaper than even just a year ago, when rates were thought to be extremely favorable. At the time, 30-year loans had rates of about 4%.
A homebuyer today would save about $27 a month for every $100,000 borrowed, compared with last November. That's a savings of $486 a year on a typical mortgage balance of $150,000.
The views, opinions, positions or strategies expressed by the authors and those providing comments or external internet links are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of First Capital, we make no representations as to accuracy, completeness, current, suitability, or validity of this information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Any information provided does not constitute an offer or a solicitation to lend. Providing information to purchase does not guarantee a loan approval. All registered trademarks, copyright, images, or other items used are property of their respective owner and are used for editorial purposes only.
First Capital Mortgage is a subsidiary of PHH Home Loans LLC, a direct lender, Dept. of Corporations file #413-0713 NMLS#4256
Visit FirstCapital Online or call: 310-458-0010