Mortgage rates, yet again, have fallen to record lows in the past week. According to Freddie Mac, the 30-year fixed mortgage rate sunk to 3.94% which matches the record low set 10 weeks previous in early October. The 15-year fixed mortgage is also down to a new low of 3.21% which is lower than the 3.26% record set back in October as well.
Mortgage rates have sat below 5% for nearly the entire year, increasing above 5% only twice so far in 2011. The dropping rates certainly have gained a lot of attention and according to the Mortgage Bankers Association mortgage applications have increased nearly 13% in recent weeks. Refinances have also boomed as current owners jumped to decrease their payments.
The new mortgage rates translate to even further savings for home-buyers in a time when both buyers and the market could benefit most from sales traction. CNNMoney recently ran an example of a 15-year $200,000 mortgage at 5%, showing that monthly payments would actually end up being $182 lower at the new 3.2% rate.
These low interest rates, coupled with the more affordable pricing and shrinking inventory, should make for a very exciting 2012 real estate market.