Chart of the Day: Mortgage Rates Dip Below 4%

More

The Federal Reserve's new policies appear to be having an effect: mortgage interest rates are falling. They were low before, but this week, they hit a new milestone. Average 30-year mortgage interest rates have fallen below 4% for the first time on record, according to Freddie Mac. And the Fed's action has only just begun.

Here's a chart to put this week's drop into perspective:

mortgage interest rates 2011-10-06.png

The average rate was just 3.94% this week. That's down from 4.01% last week, which was also a record at the time. You can see just how low this rate is through this historical context. In the early 1980s, rates peaked above 18%. Even during the housing bubble, they remained above 5%.

These rates provide an unprecedented opportunity for homeowners to secure a very low interest rate. That is, if they can qualify for a new mortgage or refinancing. Banks remain relatively strict with their credit. Many mortgage borrowers who are underwater, have very little equity, or less-than-perfect credit histories may have trouble taking advantage of these very low rates.

But for those who can qualify, this is probably a once-in-a-lifetime opportunity. A 30-year fixed interest rate below 4% is a very low cost for borrowing. The big question now is: how low will rates go?

Jump to comments
Presented by

Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.
Get Today's Top Stories in Your Inbox (preview)

Why Are Americans So Bad at Saving Money?

The U.S. is particularly miserable at putting aside money for the future. Should we blame our paychecks or our psychology?


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In