30-Year Fixed-Rate Drops Below 5%

The 30-year fixed-rate mortgage averaged 4.96% with an average 0.7 point for the week ending January 15, 2009, representing a decline from 5.01% last week and its first time below 5%, according to Freddie Mac. Last year at this time, the 30-year FRM averaged 5.69%. Similarly, five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.25%t his week, with an average 0.6 point, down from last week when it averaged 5.49%. A year ago, the 5-year ARM averaged 5.4% and it has not been lower since the week ending September 8, 2005, when it averaged 5.24%. Also, the one-year Treasury-indexed ARMs averaged 4.89% this week with an average 0.5 point, down from last week when it averaged 4.95%. At this time last year it averaged 5.26%. However, the 15-year FRM this week averaged 4.65% with an average 0.7 point, up from last week when it averaged 4.62 percent. A year ago at this time, the 15-year FRM averaged 5.21%. "Interest rates for 30-year fixed rate mortgages fell for the 11th straight week to another record low, due in part to the slowing economy and government actions," said Frank Nothaft, Freddie Mac vice president and chief economist. "So far, both the U.S. Treasury Department and the Federal Reserve have added over $100 billion in liquidity to the mortgage market since September 2008, which put downward pressure on interest rates for fixed-rate mortgages."