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)

CrossFit Versus Yoga: Choose a Side

How a workout becomes a social identity


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

CrossFit Versus Yoga: Choose a Side

How a workout becomes a social identity

Video

Is Technology Making Us Better Storytellers?

The minds behind House of Cards and The Moth weigh in.

Video

A Short Film That Skewers Hollywood

A studio executive concocts an animated blockbuster. Who cares about the story?

Video

In Online Dating, Everyone's a Little Bit Racist

The co-founder of OKCupid shares findings from his analysis of millions of users' data.

Video

What Is a Sandwich?

We're overthinking sandwiches, so you don't have to.

Video

Let's Talk About Not Smoking

Why does smoking maintain its allure? James Hamblin seeks the wisdom of a cool person.

Writers

Up
Down

More in Business

Just In