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Mortgage Rates Slam into New Record Lows as Europe Wobbles

Mortgage rates continued to drop Thursday as the average 30-year fixed mortgage rate slammed into a new record low of 3.87 percent, according to ""Freddie Mac"":http://www.freddiemac.com/.


The GSE found that for interest rates for the 15-year loan fell to 3.13 percent, while the jumbo 30-year fixed mortgage declined to 4.47 percent, each setting record lows.

Adjustable-mortgage rates were mixed, with the average 3-year and 1-year ARMs inching higher to 3.07 percent. The popular 5-year and 1-year ARMs pulled back below the 3 percent threshold to a record low of 2.96 percent.

Instability in the European and global landscapes continues to play a major role in historically low mortgage rates.

""While Europe has staved off any immediate meltdown ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô at least temporarily ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô concerns about the U.S. economy continue to mount as hiring is slow and the manufacturing sector shows surprise weakness,"" ""Bankrate.com"":http://www.bankrate.com/, which tracks mortgage rates in a separate weekly survey, said in a statement. ""The prevailing nervousness in financial markets, surrounding both Europe and the global economic landscape, are keeping mortgage rates at ultra-low levels.""

The Web site also said that mortgage rates have not been above 6 percent since Nov. 2008. At that time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86.

With the average rate now 3.87 percent, the monthly payment for the same size loan would be $939.90, a difference of nearly $302 per month for anyone refinancing now.

""Frank Nothaft"":http://www.freddiemac.com/bios/exec/nothaft.html, VP and chief economist with Freddie Mac, attributes less consumer spending as one of the causes of the continued rate decrease.

""Recent economic data releases of less consumer spending and a contraction in the manufacturing industry drove long-term Treasury bond yields lower over the week and allowed fixed mortgage rates to hit new all-time record lows,"" he said.

About Author: Sara Ortega


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