U.S. mortgage rates fell to a record low of 4.85% last week, providing consumers with substantial incentive to refinance. The 30-year fixed-rate mortgage is the lowest since Freddie Mac started the Primary Mortgage Market Survey in 1971.
Realizing that this historic opportunity will be relatively short lived, consumers who feel they may have difficulty taking advantage of these low rates are seeking answers to get themselves in a better position to do so.
Professional credit score enhancement, which includes credit repair, debt negotiations, and consumer education about credit scoring is playing a key role lifting discouraged applicants' hopes.
Freddie Mac, a mortgage finance company chartered by Congress, said the 15-year fixed-rate mortgage also hit a record low averaging 4.58 percent in the latest week, down from 4.61 the prior week.
"The Federal Reserve's announcement that it intends to purchase Treasury securities over the next six months caused bond yields to drop and mortgage rates followed," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
Low mortgage rates have spurred a surge in home refinancing loans. The impact on purchase loan volume has been much smaller in the face of the current housing downturn.
However, Lawrence J. White, professor of economics at New York University's Stern School of Business emphasized that "Everything helps when it comes to the U.S. housing market and lower interest rates on mortgages should make it easier for buyers to enter the market and absorb supply, which is still quite high."
Mortgage Rates Drop to Record Low Last Week