The popularity of FHA home loans has exploded since the dip in the economy, with FHA loans now accounting for almost 30% of mortgages in the United States. With interest rates aggressively low, now is a great time consider refinancing with an FHA adjustable-rate mortgage (ARM). Whether you’re buying your first home, looking into a fixer-upper, making your home more energy-efficient, or just looking to refinance, a government-backed FHA ARM may be the best option to help you reach your financial goals.
I’m not talking about Miguel Cabrera winning the Triple Crown (you know I had to throw that in there) or me winning my fantasy baseball league (this one was definitely unexpected).
I’m talking about mortgage rates taking yet another drop and setting new record lows across the board this week, continuing a three-week long free fall.
Just to be perfectly clear here – “record low” means that the average mortgage rates across the country have never been lower than they currently are today, according to Freddie Mac’s weekly Primary Mortgage Market Survey.
Are you as shocked as I am? Every week, I think mortgage rates have hit rock bottom, and I keep getting proved wrong. So, let’s take a gander at the numbers, shall we?
30-year fixed-rate mortgages fell to a new record low of 3.36% with 0.6 points from last week’s previous record of 3.40% with 0.6 points. This marks the second week in a row that a new record-low rate was set. Last year at this time, 30-year fixed-mortgage rates averaged 3.94%.
15-year fixed-rate mortgages set a new all-time low this week as wall, dropping from last week’s previous record of 2.73% with 0.6 points to 2.69% with 0.5 points this week. Additionally, this is the third week in a row that 15-year fixed-rate mortgages set a new record low. 12 months ago, 15-year fixed-rate mortgages averaged 3.26%.
5/1-year ARMs jumped slightly to 2.72% with 0.6 points this week from last week’s 2.71% with 0.6 points, while 1-year ARMs dropped to 2.57% with 0.4 points from last week’s 2.60% with 0.4 points.
Last year at this time, 5/1-year ARMs and 1-year ARMs averaged 2.96% and 2.95%, respectively.
If you’re an avid PMMS report follower, like I know you probably are, you know that I love Frank Nothaft, our favorite vice president and chief economist from Freddie Mac. Moreover, I love his two cents about mortgage rates every week.
This week, Frank said, “Fixed mortgage rates fell again this week to all-time record lows due to the mortgage securities purchases by the Federal Reserve and indicators of a weakening economy. The final estimate of growth in Gross Domestic Product was revised down to 1.3 percent in the second quarter, representing the slowest growth in a year. In addition, personal incomes rose only 0.1 percent in August, while July’s increase was revised downward. And finally, pending home sales in August fell 2.6 percent, well below the market consensus forecast of a slight increase.”
The fact of the matter is that even though mortgage rates took another dip, if you try to refinance or lock in a mortgage rate next week, we can’t guarantee that rates will be this low.
Lock in today, people, and don’t think twice.