Already Low, Mortgage Rates Drop Again

Original Post Date: July 12, 2012

By: Victoria Stilwell and Dawn Wotapka

Mortgage rates continue falling, falling: The average mortgage rate slipped again during the past week as rates struck yet another new low, according to mortgage-finance company Freddie Mac.

For the week ended Thursday, the 30-year fixed-rate mortgage – a product that offers fixed payments and has been popular since the housing bust – averaged 3.56%, down from 3.62% the previous week and 4.51% a year earlier. Rates on 15-year fixed-rate mortgages averaged 2.86%, versus 2.89% a week earlier and 3.65% a year ago.

With 15-year rates so low, more consumers are opting for the shorter mortgage payment period. Low rates for all mortgages are also allowing more Americans to buy homes with a larger price tag — and still maintain a low payment. As we’ve written, consumers are taking advantage of low rates and buying bigger homes.

But while housing appears to be healing, some headwinds persist. While rates are low, many consumers are struggling to qualify for a mortgage amid tight lending standards. Unemployment is a concern and the foreclosure crisis, which appears to abating, is far from resolved.

Readers, do you think mortgage rates will fall to 3? If so, when?