Mortgage markets in United States are well developed and have a wide range of mortgage products. Today, mortgage services in United States are being provided by a number of entities including mortgage lenders as well as banks and credit unions. Mortgages that are most commonly used in United States include: Fixed-rate mortgages, ARMs and Jumbo mortgages.
A fixed rate mortgage is a form of mortgage in which the rate of interest remains constant throughout the entire life of the loan. On the other hand, variable rate mortgage is a form of mortgage in which the rate of interest is not constant and instead changes throughout the life of the loan depending on the economic conditions. According to Freddie Mac’s latest Primary Mortgage Market Survey (PMMS), currently average fixed mortgage rates are at new all-time record lows which in turn is sufficient to keep the homebuyer affordability quite high even in difficult market conditions.
The 30-year fixed rate mortgage averaged 3.84 percent, down from its earlier all-time record low of 3.87 as registered on February 9, 2012 whereas the 15-year fixed rate mortgage averaged 3.07 percent, falling below its earlier all-time record low of 3.11 percent as registered on April 12, 2012. The 1-year ARM (Adjustable Rate Mortgage) is also found to be averaged a new all-time record low in PMMS at 2.70 percent.
Frank Nothaft, vice president and chief economist of Freddie Mac, in an interview with ‘World Property Channel’ states that economic slowdown and higher inflation figures allowed yields on Treasury bonds to ease somewhat which in turn has resulted in the breakdown of most mortgage rates to new all-time record lows in this year. Such lucrative mortgage rates can probably trigger a boost to the housing market in coming days.
Monthly Average Commitment Rate and Points on 30-Year Fixed-Rate Mortgages Since 2010
|
2012 |
2011 |
2010 |
||||
|
Rate |
Pts |
Rate |
Pts |
Rate |
Pts |
|
| January |
3.92 |
0.8 |
4.76 |
0.8 |
5.03 |
0.7 |
| February |
3.89 |
0.8 |
4.95 |
0.7 |
4.99 |
0.7 |
| March |
3.95 |
0.8 |
4.84 |
0.7 |
4.97 |
0.7 |
| April |
3.91 |
0.7 |
4.84 |
0.7 |
5.10 |
0.7 |
| May |
4.64 |
0.7 |
4.89 |
0.7 |
||
| June |
4.51 |
0.7 |
4.74 |
0.7 |
||
| July |
4.55 |
0.7 |
4.56 |
0.7 |
||
| August |
4.27 |
0.7 |
4.43 |
0.7 |
||
| September |
4.11 |
0.7 |
4.35 |
0.7 |
||
| October |
4.07 |
0.8 |
4.23 |
0.8 |
||
| November |
3.99 |
0.7 |
4.30 |
0.8 |
||
| December |
3.96 |
0.7 |
4.71 |
0.7 |
||
| Annual Average |
4.45 |
0.7 |
4.69 |
0.7 |
||
