Chart of the Day: Mortgage Rates Dip Below 4%

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?

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.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

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

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In