The 30-year fixed-rate mortgage, continuing to test new lows, dropped below 4% for the first time in modern history to 3.94% during the week ending Oct. 6, according to Freddie Mac's weekly survey.
A spokesman confirmed that the 30-year's average of 4.01% last week was previously the lowest the weekly rate has been. Freddie has been following rates since its startup in 1970.
While the week-to-week drop below 4% is only a matter of seven basis points, it marks a benchmark level that could have more of a psychological impact on borrowers who qualify for new loans and have a rate high enough to benefit enough from a refinance.
The general persistence of tight underwriting guidelines and a relatively high percentage of underwater loans in the market generally continue to limit the number of borrowers that can qualify.
Freddie's survey for the most recent week also shows the average rate for a 15-year fixed-rate mortgage dropped two basis points to an all-time low at 3.28%, while the average rate for the five-year Treasury-indexed hybrid adjustable-rate mortgage slid 6 basis points to 2.96%.
The only average rate that rose was that of the one-year Treasury ARM, which was up 12 basis points at 2.95%.
Average points were relatively high for fixed-rate loans in the most recent week at 0.8 of a point for both 30-year and 15-year product, while five-year Treasury hybrids charged on average 0.6 of a point and one-year Treasury ARMs charged an average of 0.5 of a point.
A year ago the average weekly 30-year rate was 4.27%, the average weekly 15-year rate was 3.72%, the average weekly five-year Treasury hybrid rate was 3.47% and the average weekly one-year ARM rate was 3.4%.
