After a brief surge above 4% last month, mortgage rates have settled near their lowest levels of all-time. According to Freddie Mac’s weekly Primary Mortgage Market Survey, average 30-year fixed mortgage rates fell to 3.88% with 0.7 points this week (1 point equals 1% of the loan amount, so 0.7 points equates to $700 for each $100,000 in loan amount).
Mortgage rates are down this week largely over concerns that Spain and Italy will have trouble servicing their debts in the future. Investors are selling relatively risky assets and using the proceeds to purchase U.S. government-backed bonds. This creates demand for mortgage bonds and pushes down mortgage rates.
Freddie Mac’s survey of 125 banks showed the following regional breakdown :
- Northeast Region : 3.88% with 0.8 discount points
- West Region : 3.85% with 0.8 discount points
- Southeast Region : 3.91% with 0.8 discount points
- North Central Region : 3.89% with 0.6 discount points
- Southwest Region : 3.90% with 0.8 discount points
The best mortgage “deals” are currently available to residents in the North Central Region. The most expensive loans are for those in the Southeast Region.
Having said that, it’s important to realize that mortgage rates are incredibly low from a historical perspective. Conforming 30-year fixed rate mortgage rates have never been as low as they are today.