30-year mortgage rate drops to 4.19%

By Reuters
Posted Oct. 14, 2010 at 9:05 a.m.

U.S. mortgage rates reached new record lows in the latest week, according to a Freddie Mac survey released on Thursday, as weak economic data fueled demand for safe-haven government debt.

Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.19 percent for the week ended Oct. 14, down from the previous week’s 4.27 percent and the lowest on record, according to the survey.

The 30-year fixed-rate mortgage has been under 5 percent for 23 weeks in row. Rates were also below their year-ago level of 4.92 percent.

Freddie Mac, the second-largest U.S. mortgage finance company, started the survey in April 1971.

While rock-bottom rates offer a glimmer of hope for a housing market struggling to find footing in the aftermath of the expiration of popular home buyer tax credits earlier this year, their impact on demand for home purchase loans has been tepid. A weak jobs market and flailing economy continue to weigh on consumer confidence.

Meanwhile, 15-year fixed-rate mortgages averaged 3.62 percent, down from 3.72 percent last week, the lowest since Freddie Mac began surveying this loan type in 1991.

“September’s employment report held no big surprises to financial markets, allowing long-term bond yields and fixed mortgage rates to continue to ease,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

“As a result, both the 30-year and 15-year fixed mortgage rates hit all-time record lows for the third consecutive week,” he said.

Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.

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  1. overeducatedunderemployed Oct. 14, 2010 at 9:53 a.m.

    man, rich people with money must be making a killing with rates like that, buying up everything! its like a clearance/discount sale on our lives.

  2. don g Oct. 14, 2010 at 10:17 a.m.

    And dropping, stimulus plan should include everyone having a 1% mortgage rate, Gov’t stimulus plan would make up the difference, price of homes/new homes would take off, otherwise rates will contnue to fall.
    Come on Obama help the middle class out.

  3. KING_PIN Oct. 14, 2010 at 10:19 a.m.


    I am holding out for 1% on a 15 year fixed.

    Put no money down, pay only interest,
    or skip payments , no proof of income,
    5 year balloon payment, no credit check.

    This is the next bailout.


  4. B Oct. 14, 2010 at 11:30 a.m.

    I sure wish I could refinance, but our value tanking right after we bought the house three years ago has eliminated any possiblity of that since we have no equity anymore. That’s the one stimulus I’d support: allowing more people to refinance. I would think it would reduce the number of foreclosures and help the housing market.

  5. Jim Oct. 14, 2010 at 11:40 a.m.

    Regardless of how low interest rates are, buying a home is not the same investment it used to be. For many, there are better ways to get a return on your dollar these days–and for years to come.

  6. Ishka Oct. 14, 2010 at 11:54 a.m.


    That program exists- it’s called a HARP refinance, and most of the big banks/brokers are participating. You can refinance your house up to 125% of it’s appraised value.

  7. mariog Oct. 14, 2010 at 12:19 pm

    Hey “B”, why sould there be any stimulus for someone whose house declined in value? It happens. Timing is everything.

    But I sure don’t want to pay for the risk you take that doesn’t pay off according to your perceptions, slick sales people or just the random movement of the economy.

    Aound 20+ years or so ago houses in the Greater Boston area were selling at record prices. Then the economy sputtered and suddenly houses that were bought for $200,000.00 (a sizable sum then) months prior were worth $175,000.00. There was much wailing and knashing of teeth but lo and behold, things turned around and viola, houses increased in value and all was well on the earth.
    Hang in there. The value of your house is only important when you try to sell it. If the value has truly gone down, you’ll save some $$ if you push for a reduced tax assesment.
    Keep in mind as things improve, your house is not an ATM.

  8. Fairnequal Oct. 14, 2010 at 12:45 pm

    “man, rich people with money must be making a killing with rates like that, buying up everything! its like a clearance/discount sale on our lives.”

    Man poor people must be lovin’ their 2+ years of vacation w/ more on the way. It’s like… they don’t have to work, pay taxes, pay their bills, medical costs, food, shelter because the working stiff’s out their will do it for them.

  9. 867-5309 Oct. 14, 2010 at 1:30 pm

    @mariog: Hang in there. The value of your house is only important when you try to sell it.

    Many people in situations as mine will have to “hang in there” for many years waiting for home values to catch up to our loan amount. Thanks to foreclosures, short-sells, and midnight “movers” in my area, my home value/loan is currently 70,000 in the hole. Given historical increases of 3%/year in my area in years past, I expect to be in the black in 7-8 years.

    Now, given that most of us have life changing events every 5 years, we wouldn’t be able to sell…unless we short-sell.

  10. Jack Oct. 14, 2010 at 2:33 pm

    Buying a home is still a great investment. Even if you end up not making a dollar off of the sale, you (1) have not had to pay $1 in rent the entire time you lived in the home and (2) have gotten a mortgage interest deduction on your tax return (granted that is offset by property taxes – but those are also deductable on your individual return.)

    4.2% is an incredibly awesome rate.

  11. Jack Oct. 14, 2010 at 2:34 pm

    Oh and “rich people”? Many people can afford a home if they look within their means and live within their means.

  12. C Oct. 14, 2010 at 2:50 pm

    HARP is only available to those with a Freddie or Fannie loan. Those of us without that type of loan, who’s home values have now dropped simply can’t refinance to take advantage of the low rates. We are stuck paying on our higher interest loan … hoping that we are able to keep our jobs, to pay our mortgage and that values increase before something unfortunate happens that forces us to sell. There doesn’t seem to be anyone looking for ways to support those of us who are playing by the rules.

  13. JEFF Oct. 14, 2010 at 4:43 pm

    The FED can destoy our dollar all they want to try bringing down interest rates, but that doesn’t mean people will buy these over priced homes. The FED is just setting us up for an even bigger bubble! Commodity prices are booming, while Americans suffer from the the FED’s Inflationist tactics trying to keep their wealthy banker buddies from losing their butts!

  14. jimbo Oct. 14, 2010 at 5:00 pm

    @Jack “Hang in there. The value of your house is only important when you try to sell it.”

    Well, not really. You can’t get a home equity loan if your home value is in the tank. You’ll also pay PMI if you (can) refinance when your loan to home value ratio is 80% or more.

  15. jimbo Oct. 14, 2010 at 5:02 pm

    Sry – @ 867-5309 for the above comment

  16. KrisPy Oct. 14, 2010 at 5:48 pm

    I wish I could refinance but I’m underwater like many others and I don’t quality for a loan modification because I don’t have a Fannie May mortgage, my original lender/bank went bankrupt, and now my loans — 1st & 2nd mortgages with 7.5% and 10.4% rates — are owned by private investors. I’m stuck for the duration or until my property’s value goes up to where I can refinance somewhere.

  17. Jim Oct. 14, 2010 at 6:29 pm

    “Now, given that most of us have life changing events every 5 years, we wouldn’t be able to sell…unless we short-sell.”

    So, I don’t know what the magic number is, but if you’re not reasonably certain that you can stay in your house for at least 5-10-15-20 years (whatever the “right” number is), then you just shouldn’t be buying a house. So many people in this country think that the end all and be all is owning property. Owning a house comes with substantial risk, and as has been pointed out, you just can’t count on being able to cash out for a profit whenever you need to. Life is fun of unexpected surprises. Take steps to ensure that you are prepared for those surprises–and that may mean (gasp!) not owning a house!

  18. Aaron Oct. 14, 2010 at 7:29 pm

    @ Jack a home is a terrible investment, all those taxes you have to pay not to mention the excessive heating/cooling bills electric bills and the oven that broke last thanksgiving, and the window the kids broke playing baseball. You are so right I saved so much money owning a home, NOT!

  19. jacob Oct. 14, 2010 at 7:30 pm

    The fact that the company servicing your loan (who you send your payment to) isn’t Fannie or Freddie does not mean you aren’t qualified for HARP. There are websites to check to see if your loan qualifies for HARP. Unless you have a nonconforming loan (such as a jumbo loan), more likely than not Fannie owns it.

  20. Bluejeans Oct. 14, 2010 at 9:59 pm

    Gotta love these articles. They never report the strings that are attached to these interest rates. Unless you have a credit rating above 740, it’s not realistic to expect these (low low) rates. And the curve for less-than-stellar credit is a sharp one.

  21. anti-jack Oct. 14, 2010 at 10:18 pm

    @Jack -

    umm no.

    here is some math:
    ( 1 – your tax % ) x interest paid during year = rent
    ( 1 – your tax % ) x property taxes = rent

    if you are an unfortunate fool ( i am checking that box ) who owns a condo/townhome – then monthly assoc fees – basically rent

    if you bought with less than 20% down and pay PMI – rent.

    if/when you sell – you pay ~ 10% commission of the selling price to a broker ( it you go that route )

    if you happen to be in the black – the IRS is waiting for you if you don’t plunge the proceeds back into another money trap.

    anyone who bought in the last 7 years is toast. the lax lending standards brought in subprime folks to help bid up all the prices in the chain. we will NEVER see it come back – unless the rest of the world wakes up to the fact that the dollar is dirt, and we go to massive inflation ( a la argentina style ). i think we would have riots first.

    if you have access to a bloomberg terminal – they have this really neat rent-or-buy calculator – appropriately titled “ROB”.

  22. goodness Oct. 14, 2010 at 10:54 pm

    My wife and I are approaching “empty nester” age soon (6 years) and, based on market expectations in 6 years, we’re screwed…we’d be lucky to walk away with enough money for a 6-pack of Bud. We’re gonna rent next time.

  23. 867-5309 Oct. 14, 2010 at 10:58 pm

    Sorry, I was quoting Mariog, not Jack.

  24. M. Harney Oct. 14, 2010 at 11:32 pm

    I’d like to know who exactly is qualifying for these rates. I know I haven’t. I never had to pay PMI in the past and I refuse to do so now. Something is seriously wrong with this whole industry.

  25. Ronnie Oct. 15, 2010 at 3:44 pm

    M. Harney- you refuse to pay PMI? First thing… its that sort of view that so many loan officers can’t stand under the current market conditions…. as if lending money to you is an entitlement where you can call the shots (you are likely in the late 20’s to late 30’s in age- right?

    Second, you dont’ know what you are saying since PMI doesn’t make a difference anymore as its now a tax deductible cost. Under stimulus plan #1 it became a tax deduction on income taxes… in the past, it was the lack of deduction that made it so unattractive to pay and it paved the way for the creation of second mortgages above 80% total financing where it somehow made sense to hold a higher rate for the second mortgage but at least mortgage interest was a deduction off income tax.

    The key is… the industry WAS REALLY MESSED UP and that’s why you were able to get a mortgage without PMI. Now, the industry is on a flight back to qualify and, as it was before the crazy mortgage refinance boom, if you don’t have 20% free equity in the home- you have to hold PMI.