As the debt crisis in Europe continues to worsen and investors look to Treasury bonds for security, fixed mortgage rates fell to all-time record lows in the last week of May.[IMAGE]
According to the results of ""Freddie Mac's"":http://www.freddiemac.com/ Primary Mortgage Market Survey, the 30-year fixed averaged 3.75 percent with an average 0.8 point for the week ending May 31.
This is down from 3.88 percent the previous week and 4.55 percent at the same time last year. The 15-year fixed rate mortgage also fell, averaging 2.97 percent and bringing three of the four benchmark mortgage rates under 3 percent for the first time in the history of the weekly survey.
""Bankrate.com's"":http://www.bankrate.com/ weekly survey showed the same results: The 30-year fixed averaged fell to 3.94 percent from 3.97 percent the[COLUMN_BREAK]
week before while the average 15-year fixed dropped to 3.15 percent from 3.19 percent.
Bankrate.com showed that adjustable rate mortgage (ARM) averages also fell, with the average 3-year ARM dropping to 3.08 percent and the 5-year sliding down to 3.01 percent.
Freddie Mac's PMMS found that the 1-year Treasury-indexed ARM average stayed at the same level while the average 5-year Treasury-indexed ARM actually increased to 2.84, a hundredth of a percentage point up from the previous week.
This was still a decrease from the same time last year, when the average 5-year ARM was 3.41 percent.
The fixed rate drops come along with all-time low yields in Treasury bonds as uncertainty grows in Europe. With stocks falling, investors have been seeking the relative safety of U.S. debt. Freddie Mac VP and Chief Economist ""Frank Nothaft"":http://www.freddiemac.com/bios/exec/nothaft.html attributed the rate drops to this investor activity and explained what it could mean for borrowers and potential homebuyers.
""Market concerns over tensions in the Eurozone led to a decline in long-term Treasury bond yields helping to bring fixed mortgage rates to new record lows this week,"" he said. ""Compared to a year ago, rates on 30-year fixed mortgage rates are almost 0.9 percentage points lower which translates into nearly $1,200 less in annual payments on a $200,000 loan.""
""Mario Draghi"":http://www.ecb.int/ecb/orga/decisions/html/cvdraghi.en.html, president of the ""European Central Bank"":http://www.ecb.int/home/html/index.en.html, recently warned that the euro zone has become ""unstable"" as political leaders struggle to formulate a bailout plan.