Conventional, VA and FHA mortgage rates remain at very low levels which are good news for homeowners seeking mortgage refinancing or new home buyers seeking affordable financing.  The thirty year fixed mortgage rates averaged 5.22% for the week ended Thursday, down from last week’s 5.25% average and 6.52% a year ago.  Interest rates on 15-year fixed-rate mortgages home loans were 4.63%, down from 4.69% last week and 6.1% a year earlier. Mortgage rates declined slightly this week after rising up last month, according to Freddie Mac’s weekly survey of mortgage interest rates. After dropping to record levels earlier this year, rates on the benchmark 30-year fixed-rate mortgage rose back above 5% as Treasuries gave up some of their gains and home buying activity picked up. Higher Treasury yields generally result in higher mortgage rates.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.73%, down from last week’s 4.75% and 6.05% a year earlier. One-year Treasury-indexed ARMs were 4.78%, down from 4.8% last week and 5.22% last year.  To obtain the interest rates this low, the fixed rate home loans and the five-year ARM rate will cost about 0.6 point and the one-year ARM required an average 0.5 point.

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According to Southern California mortgage brokers, the average interest rate on a thirty-year mortgage loan with a fixed rate dropped last week back down to the 5% range.  Mortgage rates declined down from the 5.25% to 5.5% range last month as the U.S. unemployment rate hit 9.5%.  Lead Executive, Dan Ambrose of the Lead Planet, a direct mortgage lead provider that specializes in high quality internet leads, said that, ”The demand for mortgage and loan modification leads increases every time the rates decline in the marketplace for consumers.” 

A soft economy means investors buy U.S. Treasuries for their safety, which drags down their yields and indirectly leads to lower fixed mortgage rates. California borrowers with good credit today can get a 30-year conforming, VA, or FHA mortgage as low as 4.875% with 0.625-point fee, said Jeff Lazerson, head of online brokerage Mortgage Grader in Laguna Niguel. That’s for “conventional” loans up to $417,000 that can be sold to Fannie Mae or Freddie Mac.  In most cases, these mortgage loans carry the lowest rates on the mortgage market. “Interest rates are lower because putting lipstick on a pig only works until you take a closer look…it’s still a pig,” Lazerson said. “In other words, the government and the Wall Street gatekeepers have been hyping that the economy is getting better. It’s not getting better. Some say, California consumers aren’t spending because they are worried about their jobs, if they haven’t already lost their jobs.” 

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