30-Year Fixed Rate Mortgage Hits Record Low, 3.94% (Freddie Mac)

30-Year Fixed Rate Mortgage Average - St. Louis Fed
According to Freddie Mac's Primary Mortgage Market Survey®, the 30-year fixed mortgage rate hit a new record low today at 3.94%. You can find a chart of the 30-Year Fixed Rate Mortgage, which starts in 1976, at the St. Louis Fed's FRED database. The trend remains down as you can see, and the Fed's new Operation Twist policy, where they sell $400 billion of the short end of the Treasury curve to buy the long end, will try to bring the rate down even further to spark more home buying / mortgage originations.

With market, economic and deflation risk recently, there has been demand for Treasury debt. I see the 10-year Treasury Note Price is testing the 50 day moving average, watch to see if that support level sticks. Bob Janjuah of Nomura has a target of 1.25-1.5% on the 10-year note. The market is trying to figure out how deep this slowdown is versus the chance of QE3 (more asset purchases by the Fed). What do you think, housing bottoms (or clears) when 30-year mortgages are 1.5% with 120% loan-to-value ratios and no documentation (hehe)?

Read the release for info on the 15-year Fixed Rate Mortgage, 1-year and 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM).

"30-year fixed-rate mortgage (FRM) averaged 3.94 percent with an average 0.8 point for the week ending October 6, 2011, down from last week when it averaged 4.01 percent. Last year at this time, the 30-year FRM averaged 4.27 percent."

Quotes Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

"Average 30-year conventional fixed mortgage rates fell below 4 percent for the first time in history this week following a sharp drop in 10-year Treasuries early in the week as concerns over a global recession grew. Average 15-year fixed rates fell to a record low in the PMMS as well. Interest rates for 1-year ARMs, however, rose, as the Fed began replacing $400 billion of its short-term Treasury securities, which serve as benchmarks for many ARMs. Also, in his testimony to Congress's Joint Economic Committee on Tuesday, Federal Reserve Chairman Bernanke said the recovery is close to 'faltering' and stressed the need for lawmakers to act.

"Meanwhile, the Bureau of Economic Analysis (BEA) reported consumer spending inched up 0.2 percent in August, while personal income fell 0.1 percent, the first decline since October 2009. Also, pending home sales declined for the second consecutive month in August, with some of the decline attributed to Hurricane Irene."