Fixed mortgage rates match record lows after QE3 announcement
A recent announcement from the Federal Reserve stating it planned to implement a new bond purchase plan caused fixed mortgage rates to fall back to record lows.
During the week ending September 20, the average rate for a 30-year FRM was 3.49 percent, down from 3.55 percent a week earlier, according to a report from Freddie Mac. Meanwhile, average 15-year FRMs declined to 2.77 percent, from 2.86 percent during the same period. Rates for 30-year loans have hovered below 4 percent for all but one week so far this year.
"Following the Federal Reserve's announcement of a new bond purchase plan, yields on mortgage-backed securities fell bringing average fixed mortgage rates to their all-time record lows which should aid in the ongoing housing recovery," said Freddie Mac vice president and chief economist Frank Nothaft.
Meanwhile, recent improvements throughout the housing market also contributed to the mortgage rate decline, Nothaft added.
Specifically, in August, the construction rate on single-family properties surged 5.5 percent from a month earlier, the Department of Housing and Urban Development reports. This development could give prospective buyers additional options when they enter the housing market in the near future.