Mortgage rates hit all-time lows for the second consecutive week, as the Federal Reserve continued with its plan to buy more mortgage securities and the economy weakened, according to Freddie Mac.
The government-sponsored enterprise's Primary Mortgage Market Survey showed 30-year fixed-rate mortgages averaged 3.36 percent in the week ending October 4, a slight decline from the previous week's average of 3.4 percent.
Meanwhile, the average rate for a 15-year FRM dropped below the average 5-year adjustable-rate mortgage for the first time in three years.
Frank Nothaft, the GSE's vice president and chief economist, said that a downwardly revised gross domestic product estimate, slow personal income growth and declining pending home sales all contributed to the decline of averages for FRMs.
Despite low rates, banks have continued to have tight lending standards, as they are burdened by old mortgage, according to the Wall Street Journal. With Fannie Mae and Freddie Mac forcing banks to buy back loans, they have had to protect themselves by using stricter standards. However, home buying is still more affordable than ever for qualified borrowers.
