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The national average rate on the 30-year loan fell to 4.96% in the week ending Jan. 15, down from 5.01% a week ago. That is the lowest on record. Freddie Mac began its rate survey in 1971. A year ago the loan averaged 5.69%.

 

Adjustable-rate loans also fell. The 5-year, Treasury-indexed hybrid mortgage averaged 5.25%, down from 5.49%. A year ago the loan stood at 5.40% and has not been this low since September 2005. The 1-year, Treasury-indexed ARM averaged 4.89%, down from 4.95%. A year ago that loan was at 5.26%.

The 15-year fixed-rate mortgage, a popular refinancing choice, edged up to 4.65% from 4.62% a week ago. Last year at this time the loan averaged 5.21%. Refinancing activity has been strong as mortgage rates have plumbed historic lows.  The two fixed-rate loans required the payment of an average 0.7 point to achieve the interest rate; the hybrid needed 0.6 point and the ARM 0.5 point. A point is one percent of the loan amount, charged a prepaid interest.

 

"Interest rates for 30-year fixed rate mortgages fell for the 11th straight week to another record low, due in part to the slowing economy and government actions," said Frank Nothaft, Freddie Mac chief economist.

"Both the U.S. Treasury Department and the Federal Reserve have added over $100 billion in liquidity to the mortgage market since September 2008, which put downward pressure on interest rates for fixed-rate mortgages.  The Federal Reserve may add up to an additional $570 billion more this year, based on its November 25, 2008 announcement, to further shore up mortgage lending and keep rates low."

 

"In December, the unemployment rate rose to 7.2 percent, the highest since January 1993, and the economy lost 2.6 million jobs over 2008, the largest annual drop since 1945. That brought down yields on Treasury securities and mortgage rates followed," Nothaft said.