Mortgage Rates Fall to New Low

The cost of borrowing to buy a home is now at its lowest level in almost four decades.

Freddie Mac said the average 30-year fixed-rate mortgage fell from 4.85 percent last week to 4.78 percent this week, a full 1 percent lower than a year ago and the lowest 30 year rate since Freddie Mac started keeping track in 1971.

Long-term adjustable rate mortgages are now on-par with adjustable rate mortgages, with the average one year ARM at 4.75 percent this week.

“Mortgage rates followed other interest rates lower this week amid reports of slower economic growth,” said Freddie Mac chief economist Frank Nothaft. “The final estimate of economic growth in the fourth quarter was revised lower and personal incomes fell 0.2 percent in February, below market consensus.”

Source: Freddie Mac

U.S. Housing Market Rebound?

PMI's quarterly Economic and Real Estate Trends (ERET) report is out. Click here.

If we look at historical trends in every recession for which we have data, going back to 1960's, the housing market is usually the first sector to get hit but will turn upward before the end of the economic downtown. Conversely, job market indicators like payroll employment and unemployment rate have never improved before the recession's end, and usually have not improved until some months after the beginning of the next expansion. As a result, in past recessions the housing market has always rebounded before the job market.

The report includes commentary on the national economy and regional housing price trends. Each issue feeatures the U.S. Market Risk Index, a tabular presentation of 381 of the most populated Metropolitan Statistical Areas (MSAs). The index is based on a statistical model utilizing economic data, real estate variables and market expertise. The model provides several measures to gauge relative residential lending risk.

For Economic and Real Estate Trends archives, view all ERET reports.