Mortgage rates continue to drop and recent statistics show that the price of long-term lending is approaching historically low numbers. Results of this week's ""survey"":http://www.freddiemac.com/pmms/data.html?type=popup&heig0ht=600&width=700&week=47&year=2011 from ""Freddie Mac"":http://www.freddiemac.com/ show that an unexpected rise in home sales coupled with low rates have brought the cost of borrowing to its second-lowest level ever recorded.[IMAGE]
Percentages for a 30-year fixed rate mortgage loan fell to 3.98 percent off of 4 percent from the previous week, and the averages for 15-year fixed rate mortgages hit 3.3 percent, representing a decline from 3.31 percent last week. Rates for adjustable rate mortgages dropped between weeks as well, with 5/1-year rates going to 2.91 percent off of 2.97 and 1-year ARMS falling to 2.79 from 2.98. However, the 3.98 percent total for 30-year fixed-rate mortgages isn't the lowest the country has seen this season; Freddie Mac recorded a rate of 3.94 percent last month, demonstrating the lowest average rate for the product since 1971.
The unanticipated uptick in home sales can also likely be attributed to the low cost of lending, and the pace of sales of[COLUMN_BREAK]
previously owned homes jumped to 4.97 million last month, rising from September's pace of 4.9 million. The increase in sales bucked the trend that were forecast by _Bloomberg's_ economists' survey, which called for a decline between September and October to 4.8 million.
Speaking to _Bloomberg_, U.S. economist at Toronto-based ""Capital Economics Ltd."":http://www.capitaleconomics.com/ said of the findings, ""Low interest rates have some effects. Housing is incredibly affordable at the moment due to the low interest rates and good valuations to be had as well.""
As of October, the median pricing for American homes was down by 4.7 percent year-over-year, landing at $162,500 for the month. Additionally, the most recent application data from the Mortgage Bankers Association showed a rise of 8.2 percent as of November 18, which represents the most elevated total since May of this year.
""Bankrate.com"":http://www.bankrate.com/ tallied the predictions of those in the mortgage field as to what mortgage rates will do in the week ahead, and the majority, 53 percent, forecast an unchanged rate for the next seven days. Twenty-seven percent noted that they felt rates would rise, and the remaining 20 percent said they expect to see a decline during the period.
Meanwhile, ""LendingTree's"":http://www.lendingtree.com/ look at this week's rates indicates that many mortgages were sold at rates below the national average reported by Freddie Mac. The company went on to state that the variance observed in mortgage rates fluctuated by as much as 1.2 percent, or 120-basis points. The LendingTree Weekly Mortgage Rate Pulse, which concluded its newest data report on November 21, showed that the lowest rate among those surveyed rang in at 3.75 percent for a 30-year fixed-rate mortgage.