Mortgage rates drop to 41-year low

U.S. mortgage rates hit record lows today, following the Federal Reserve’s announcement earlier this month that it would be buying up mortgage-backed securities, Bloomberg News reported. The average rate for a 30-year fixed-rate loan fell to 3.4 percent, down from 3.49 percent; that’s the lowest since 1971, when Freddie Mac’s data begins. The average 15-year rate fell to 2.73 percent, another record low, down from 2.77 percent.

“We’ve already seen low mortgage rates even before the Fed action,” Wells Fargo senior economist Anika Khan told Bloomberg. “We’ll continue to see mortgage rates come down. That means affordability will continue to be high.”

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Yields on mortgages packaged into bonds have fallen even faster than mortgage rates, allowing lenders to profit on mortgages at a record high rate; this, too, is an indicator that mortgage rates may continue to drop. [Bloomberg] — Zachary Kussin