Record-low mortgage rates return

September 20th, 2012

Housing affordability continues to increase as mortgage rates fall.

Potential homeowners shopping for a mortgage may be eligible for favorable agreements, as rates have returned to record lows.

Freddie Mac's Primary Mortgage Market Survey reveals that the average 30-year fixed-rate mortgage fell back to its unprecedented low of 3.49 percent, while the average rate for 15-year fixed-rate mortgages fell to a new record of 2.77 percent.

"Following the Federal Reserve's announcement of a new bond purchase plan, yields on mortgage-backed securities fell bringing average fixed mortgage rates to their all-time record lows which should aid in the ongoing housing recovery," said Freddic Mac chief economist Frank Nothaft. "New construction on one-family homes rebounded in August, rising by 5.5 percent to the fastest pace since April 2010. In addition, existing home sales increased by 7.8 percent in August to its strongest pace since May 2010."

While favorable mortgage rates can make homeownership more affordable to families of varying income brackets, there are several other factors buyers should consider before purchasing a home. Inquiring with a mortgage consultant on home prices in the surrounding neighborhood, supplemental insurance requirements and local amenities can help buyers make more informed decisions.