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Europe concerns hold down mortgage rates

By Palm Beach Business.com

DELRAY BEACH — Surprise! Mortgage rates dropped over the past week to a record low. Actually, it would be surprising if rates hadn’t dropped, given the trend this year.

Freddie Mac’s Primary Mortgage Market Survey reported the 30-year fixed-rate mortgage dropping to an average of 3.78 with 0.8 point, down from 3.79 percent a week earlier.

Bankrate’s national mortgage survey found the 30-year holding at 3.97 percent with 0.41 point, same as the previous week. The rate is a record low for the survey.

Bankrate cited nervousness over the European debt crisis and the future of the euro continuing to hold sway over financial markets, including mortgage rates.

Any time uncertainty prevails it is a recipe for low mortgage rates as investors flock to the safety of U.S. Treasury securities, to which mortgage rates are closely related. These issues in Europe have lingered for two years and they're not likely to solve anything right away, so the odds certainly favor an environment where mortgage rates remain low.

Also from the two surveys: Freddie Mac found the average 15-year fixed-rate mortgage holding at 3.04 percent with 0.7 point, same as a week ago, while Bankrate found the 15-year dropping slightly, to 3.19 percent with 0.35 point from 3.20 percent a week earlier.