MORTGAGE & FINANCE: 30-year mortgage rate hits another record low
NEW YORK (CNNMoney) -- Buying a home got even cheaper this week as interest rates on the 30-year fixed-rate mortgage set a record low for the fourth week in a row.
The 30-year fixed mortgage, the most popular mortgage product, dipped slightly to 3.78% from 3.79% last week, according to a weekly survey by Freddie Mac. Last year, 30-year loans averaged 4.60%. The new low can save borrowers $48 a month for every $100,000 borrowed. Over a 30-year term, that comes to $17,217 compared to last year.
Affordable mortgages, combined with much lower home prices, should help to bolster the housing market, according to Freddie Mac's chief economist, Frank Nothaft.The 15-year fixed mortgage, which is popular among those looking to refinance, held steady at 3.04%, according to Freddie Mac's survey. That's down from 3.78% a year ago.
"Mortgage rates were virtually unchanged this week with fixed-rate loans remaining at record lows and helping to drive homebuyer affordability," he said.
In fact, buying a home has reached its most affordable level in more than two decades, according to a recent report from the National Association of Home Builders and Wells Fargo.
Rates are almost half what they were at the peak of the housing bubble in mid-2006. At the
time, the median price of a U.S. home was about $250,000, according to the National Association of Home Builders, and the average interest rate was about 6.75% for a 30-year loan.
A person who bought a home in 2006 with 20% down would have made payments of $1,300 a month. Today, a person who buys a median price home of about $162,000, would pay less than half that amount, about $600 a month.