Long Term Fixed Rates Drop Below ARM's for First Time

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Long Term Fixed Rates Drop Below ARMs Mortgage interest rates continued to inch downward during the week ended April 23 and long term fixed rates are now an out-and-out better deal than ARMs from day one.

Freddie Mac's weekly Primary Mortgage Market Survey released this morning reported that the 30-year fixed-rate mortgage (FRM) averaged 4.80 percent with an average of 0.7 point for the week compared to 4.82 percent with 0.6 of point in cost during the week ended April 16.

The 30-year reached an all time low of 4.78 percent during the week ended April 2nd.

The 15-year FRM was unchanged this week, remaining at 4.48 percent. For two week in a row this rate has been at the lowest level in the 19 years Freddie Mac has tracked the 15-year FRM. Fees and points increased from 0.6 during the week of April 16 to 0.7.

Five year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) had an average contract interest rate of 4.85 percent with 0.6 point, down from 4.88 percent also with 0.6 point a week earlier. This is another new low for the hybrid which Freddie Mac began to report on in January 2005.

One-year Treasury-indexed ARMs averaged 4.82 percent, a decrease of 9 basis points from one week earlier. Fees and points dropped from 0.7 to 0.4.

With long-term fixed rates now cheaper than variable rate mortgages it is hard to imagine who is signing up for an adjustable rate? And indeed few are. The Mortgage Bankers Association reported on Wednesday that ARMs represented only 1.4 percent of all mortgage applications during the previous week.

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"The housing market is showing further signs of possible improvement. House prices rose for the second consecutive month in February, the first back-to-back increase since April 2007, according to the Federal Housing Finance Agency. Among the nine Census divisions, six experienced positive gains in February, led by a monthly increase of 3.8 percent in the Pacific Division."

Fannie Mae reported its weekly yields for the week ended April 17 on Monday.

The conventional 15-year FRM was unchanged from the previous week at 4.07 percent while the 30-year FRM increased slightly from 4.39 percent to 4.40 percent.

Government guaranteed FHA and VA loans had an average yield of 5.53 percent compared to 5.52 percent a week earlier and one-year ARMs averaged 3.35 percent, down from 3.44 percent. Call me about Low Down Government Loans and Down Payment Assistance Programs available today!

All Fannie Mae rates are quoted net of servicing fees.

Please call me directly at 714-595-0400 to discuss home buying or refinance options available. Programs include; down payment assistance or up to 105% of homes value for Fannie/Freddie Refi's Currently available (but only for limited time!!).

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