4.01: How Low Will Mortgage Rates Go?

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4.01: How Low Will Mortgage Rates Go?

September 29, 2011

A year ago, the prospect that long-term mortgage rates would drop below 4 percent seemed far-fetched. That is no longer the case.

Today, rates set yet another all-time low with Freddie Mac reporting 4.01 percent with 0.7 of a point as the average on a 30-year fixed mortgage, the lowest rate since tracking began in 1971. If you don’t count last week when rates remained steady at 4.09 percent, rates have dropped for four weeks straight.

While the all-time low rates have not had a significant effect on the national home sales market, current homeowners are taking advantage of lower borrowing costs, as evidenced by the Mortgage Bankers Association index for refinancing rising 11 percent last week.

As UrbanTurf has said before, the rates reported by Freddie Mac for 30-year mortgages are usually the best rates that the most qualified borrowers can get. A July article in The Wall Street Journal goes into more detail about this.