Mortgage rates decrease

December 28, 2012

Click Image to view larger

Bankrate.com recently released its weekly national survey, revealing the 30-year fixed mortgage rate decreased to 3.59 percent.

The source also reported that the average 15-year fixed mortgage rate decreased to 2.87 percent and the jumbo 30-year mortgage stayed consistent at 4.07 percent.

Freddie Mac also released its Primary Mortgage Market Survey recently, which is the last one that will be released for the year. The survey shows that the average fixed mortgage rates will finish the year near record lows, but home affordability will remain high for first-time homebuyers who are interested in investing in the housing market.

Mortgage rates ended this year near record lows, said Frank Nothaft, Freddie Mac vice president and chief economist. The 30-year fixed-rate mortgage averaged 3.66 percent for 2012, the lowest annual average in at least 65 years. Rates on 30-year fixed mortgages were nearly 0.6 percentage points below that of the beginning of the year, which translates into an interest payment savings of nearly $98,600 over the life of a $200,000 loan.

Nothaft added that opting for a 15-year fixed mortgage at the current rate could result in homeowners saving as much as $138,400 in interest payments.

The survey showed that the 30-year fixed rate mortgage averaged 3.35 percent with an average 0.7 point for the week ending December 27, which was a slight decrease from the 3.37 percent that was reported in the previous week.

According to the S&P Dow Jones Indices for its Home Price Indices, which is one of the leading measures of home prices, house rates increased by 4.3 percent in the 12 months ending in October in the 20-City Composite.

The October monthly numbers were weaker than September as 12 cities saw prices drop compared to seven the month before, said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. The five which turned down in October but not in September, were Atlanta, Dallas, Miami, Minneapolis and Seattle. Among all 20 cities, Chicago was the weakest with prices dropping 1.5 percent, followed by Boston where prices fell 1.4 percent.

With the housing market showing improvement heading into the new year, more Americans could spark the sector and begin investing more money into bettering the economy.