Mortgage rates hit new record low, again

According to Freddie Mac's Primary Mortgage Market Survey, mortgage rates have dropped again to new record lows. The average for the 30-year fixed mortgage rate is 3.89 percent for the week ending January 12, down from 3.91 percent last week. The 15-year fixed rate mortgage is averaging 3.16 percent, down from 3.23 percent last year, and 4.08 percent a year ago.

Frank Nothaft, vice president and chief economist for Freddie Mac, said the decreased mortgage rates follow mixed economic indicators. The economy reportedly added 1.6 million jobs in 2011, the highest annual increase since 2006. Yet, unemployment numbers remain at elevated levels. The majority of industries actually reported limited permanent hiring at the end of 2011, suggesting the labor market is not yet recovering.

However, mortgage rates are expected to stay low throughout 2012. The Chicago Tribune reported conforming mortgage rates are predicted to remain well under 5 percent and near historic lows, encouraging borrowers to refinance and shoppers to purchase homes. Although economic reports are positive, there is no clear sign of a turn around. Many experts agree that more economic stimulus and recovery efforts will be needed before the housing market, labor market and overall U.S. economy can improve.

More News