30-Year Fixed-Rate Mortgage Dips Below 5 Percent Again According to Freddie Mac

The average rate on a 30-year fixed mortgage dropped last week from 5.01% to 4.97% according to data from Freddie Mac. The average 30-year fixed mortgage from the BestCashCow rate tables also dipped slightly from 5.017% to 5.015%. Mortgage rates have vaccilated around the 5% range for the last four weeks.

Averages though won't get you a mortgage and I like to check and see what rate is actually available. Since I live in Massachusetts I checked Massachusetts mortgage rates. Below I compared the best rate I could find on a $200,000 30-year fixed rate mortgage with 0 points:

This Week Last Week

Rate: 4.750 4.750%

Points: 0 0

Fees: $1,995 $1,995

AimLoan.com continues to hold the lowest rate at 4.750% and 0 points. That's been the same lowest rate for the past 5 weeks. So, in practical purposes, rates have not moved much in the last month.

The 15-year FRM this week averaged 4.34 percent up from from last week when it averaged 4.40 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.19 versus last week's 4.27 percent. The 1-year Treasury-indexed ARM rose significantl from bit from 4.22% to 4.33%.

Here's what Freddie Mac had to say about the rate situation:

"Interest rates on 30-year fixed-rate mortgages are below 5 percent for a third week this year, which helps a number of homeowners to refinance their existing housing debt" said Frank Nothaft, Freddie Mac vice president and chief economist. "In mid-June of last year, for example, 30-year fixed-mortgage rates topped nearly 5.6 percent. Currently, the monthly payments would be almost $77 per month lower on a $200,000 loan balance.

"In all, more than two out of three mortgage applications were for refinance transactions over the first six weeks of 2010, according to the Mortgage Bankers Association."

The real question though is whether the housing market has stabilized. I wrote about how low interest rates could be a trap for first-time homebuyers in an article entitled Is It A Good Time to Buy a House When Interest Rates Are Low?

If you're going to buy a home, do it realizing that home prices could still fall further. Negotiate hard, get the best possible rate, and be comfortable with the possibility of staying in your house for some time.

Use the BestCashCow rate tables to find the best mortgage rates in your area.