(MoneyWatch) The 30-year fixed mortgage rate average broke a new record low this week, according to the latest data from Freddie Mac. Thirty-year fixed rates averaged a full percentage point lower than last year, while the 15-year FRM also set a new record low.
Fewer home sales, a sluggish economic recovery and continued fears over Europe contributed to this week's low rates.
Mortgage rates for the week ending July 26, 2012 are as follows:
- 30-year FRM rates averaged 3.49 percent, down from last week's average of 3.53 percent. At this time last year, the 30-year FRM averaged 4.55 percent.
- 15-year FRM rates averaged 2.80 percent, down from last week when they averaged 2.83 percent. One year ago, the average for a 15-year FRM was 3.66 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 2.74 percent this week, down from last week's average of 2.69 percent. A year ago, the 5-year ARM averaged 3.25 percent.
- 1-year Treasury-indexed ARM rates averaged 2.71 percent this week, up from last week when they averaged 2.69 percent. At this time last year, the 1-year ARM averaged 2.95 percent.
"Market concerns over the strength of the economic recovery brought long-term Treasury yields to new lows this week allowing fixed mortgage rates to reach record levels," Frank Nothaft, vice president and chief economist at Freddie Mac, said in a press release.
"The Conference Board Leading Economic Index showed the largest monthly decline in June since September 2011. Existing home sales fell to 4.36 million homes (annualized) in June and represented the slowest pace since October 2011. Similarly, new home sales fell in June to their lowest level since January of this year," Nothaft added.
Declining home sales, despite the low mortgage rates, are another indicator that housing prices have yet to hit bottom and that we still have quite a ways to go in many parts of the country. If you don't absolutely need to sell your home, sit tight and try to take advantage of today's lower interest rates by refinancing.
If you're a homeowner who is underwater (you owe more on your home than it's worth) and have questions about whether you qualify for a loan modification or refinancing under the Home Affordable Refinance Program (also known as HARP 2.0), contact the Homeowner's HOPE hotline at 1-888-995-HOPE or go to MakingHomeAffordable.gov.