Home Affordability Up As Rates Stay Low

By Liz Clinger Updated on 5/24/2012

As mortgage rates continue to stay at record breaking lows, housing affordability across the nation is high.

According to the Freddie Mac survey, 30-year fixed rate mortgages reached a new low at 3.78% for the week ending today, 0.01% down from last week’s 3.79% and down from last year’s rate at this time of 4.60%.

Holding steady with neither increase or decrease from last week, rates for 15-year fixed rate mortgages stayed at 3.04% as well as 5-year treasury indexed adjustable rate mortgages at 2.83%.

1-year treasury indexed adjustable rate mortgages did see a decrease in rate of 0.03%, landing at an average of 2.75% under last week’s 2.78%.

Freddie Mac’s chief economist commented on the steady low mortgage rates, claiming they drove homeowner affordability.

The proof is in the numbers, as they say. The National Association of Realtor’s housing affordability index showed an all-time record high in 1Q. Existing home sales were the highest they had been since January in the month of April, with an annualized rate of 4.62M homes purchases increasing in all regions. April hosted a rise in new home sales as well, and the FHFA’s purchase-only house price index increased 0.5% in the first quarter of 2012, over the first quarter of 2011. This was the first four-quarter increase since 1Q of 2007.

Bankrate, a home loan analytics firm surveying large banks reported no change in 30-year FRM’s, a decrease of 0.01% in 15-year FRM’s landing at 3.19% and an increase in 5/1 ARM rates from 3.0% last week to 3.02% this week.