Mortgage rates slip slightly, remain near historic lows

By Palm Beach Business.com

DELRAY BEACH — Mortgage rates continue to hang near historic lows, dropping slightly over the past week, according to both Freddie Mac and Bankrate.

The 30-year fixed-rate mortgage dropped a point in both major surveys, to 3.99 percent with 0.7 point, according to Freddie Mac, and to 4.24 percent with 0.36 point, according to Bankrate.

The 15-year also dropped, according to Freddie Mac, to 3.27 percent with 0.8 point from 3.30 percent a week ago. Bankrate found the 15-year holding steady at 3.48 percent.

Freddie Mac Chief Economist Frank Nothaft noted the low rates have made housing more affordable, at least for those who can qualify for a mortgage.

“Thirty-year fixed-rate loans have declined 0.62 percentage points from a year ago, and median sales prices on existing homes are off 4.7 percent in the year ending with October,” Nothaft said. “These low rates and home prices have pushed housing affordability to record highs this year.

“For instance, the National Housing Affordability Index, which dates back to 1971, reached another all-time record high in October for the sixth time in 2011, according to the National Association of Realtors. Monthly principal and mortgage interest payments accounted for a mere 12.6 percent of median family incomes that month.

"This level of affordability likely contributed to the rise in conventional mortgage applications for home purchases over the week of Dec. 2 to the most in nearly a year."