Oh well…
Mortgage rates hit fresh 37-year low
Borrowing costs continue to fall, but that’s failed to boost home buying.
By Les Christie, CNNMoney.com staff writer
December 31, 2008: 1:07 PM ET
NEW YORK (CNNMoney.com) – Rates on mortgage loans are the lowest in the 37-year history of the Freddie Mac Primary Mortgage Market Survey, according to a weekly report released Wednesday.
The average 30-year, fixed-rate loan issued to borrowers declined to 5.1%, with 0.7 up-front points, for the week ending December 31, according to the survey.
The rate dropped from an average of 5.14% last week, which was the previous 37-year low. Freddie Mac (FRE, Fortune 500) began surveying lenders back in 1971. The 30-year fixed was at 6.06% a year ago.
The average for a 15-year, fixed rate loan was just 4.83%, its lowest level since March 25, 2004, when it hit 4.70 percent.
“Since the end of October of this year, these rates have declined by about 1-1/3 percentage points, or payment savings of approximately $173 a month for a $200,000 loan,” said Freddie’s chief economist, Frank Nothaft in a statement. “As a result, the number of refinance applications for conventional mortgages jumped over 500 percent between the weeks ending on October 31st and December 26th.”
Housing won’t budge
Unfortunately, the low interest rates have not spurred much of an increase in the number of new loans made to home buyers. According to the Mortgage Bankers Association, nearly 83% of all mortgage applications recorded last week were to refinance existing loans](http://money.cnn.com/2008/12/24/real_estate/when_to_refi/index.htm?postversion=2008122608) rather than to buy a home, indicating that low interest rates have so far failed to free up the frozen housing market.