Fixed mortgage rates fell to all-time record lows this week following the Federal Reserveâ€™s announcement of â€œOperation Twist.â€
The central bankâ€™sÂ new stimulus policyÂ entails reinvesting principal
payments from its holdings ofÂ GSEÂ debt and mortgage-backed securities
back into new mortgage bonds issued by Fannie Mae and Freddie Mac.Â
The Fed also intends to purchase $400 billion more of Treasury securities by the end of June 2012 !!!
Data released byÂ Freddie MacÂ Thursday puts the average 30-year fixed-rate mortgage at 4.01 percent Â for the week ending September 29. Thatâ€™s down from 4.09 percent last week. A year ago at this time, the 30-year rate averaged 4.32 percent.
Of the five regions surveyed in Freddie Macâ€™s survey, the West region recorded the lowest average rate for the 30-year fixed dipping below the 4 percent to 3.95 percent this week.
The 15-year fixed-rate averaged 3.28 percent (0.7 point) this week in the GSEâ€™s survey, down from last weekâ€™s average of 3.29 percent. A year ago at this time, the 15-year rate was 3.75 percent.
Both the 30-year and 15-year fixed rates averaged an all-time record low in Freddie Macâ€™s study. Interest rates for adjustable-rate mortgages (ARMs), on the other hand, were virtually unchanged.
The 5-yearÂ ARMÂ averaged 3.02 percent (0.6 point) this week, matching last weekâ€™s average. A year ago, the 5-yearÂ ARMÂ was 3.52 percent.
The 1-yearÂ ARMÂ came in at 2.83 percent (0.6 point), up one basis point from 2.82 percent last week. At this time last year, the 1-yearÂ ARMÂ averaged 3.48 percent.
Macâ€™s surveyÂ averages mortgage rates from 125 lenders across the
Stephen F. Tohatan PhD