Across the roughly 125 surveyed banks, the average 30-year fixed rate mortgage priced at 4.09% with an accompanying 0.7 discount points. Loans with 1 point or more priced slightly lower.
Loans with "zero costs" are priced slightly higher.
Falling mortgage rates are great for homeowners trying to refinance a home loan -- conforming, FHA, USDA, or otherwise -- because falling mortgage rates improve household budgets. Dropping a mortgage rate by even one-quarter percent can yield huge, long-term savings.
But it's home buyers that are the big winners this year. Falling mortgage rates are boosting home purchasing power beyond anything we've ever seen.
When you buy a home, you think in terms of "monthly budget" and that's why mortgage rates are critical to home affordability. Your purchasing power is a direct reflection of the mortgage rates of the day.
As mortgage rates rise, purchasing power falls. As rates dip, purchasing power rises.
This is why your mortgage dollar goes so much farther today as compared to 20 years ago -- mortgage rates are scraping rock-bottom in 2011; at levels that were previously unthinkable to economists and everyone else.
Let's say you have a monthly budget of $1,700 for your mortgage.
In 1991, a $1,700 mortgage payment gets you a loan size of $200,000
In 2011, a $1,700 mortgage payment gets you a loan size of $353,000
In other words, in 2011, for the same monthly payment, you can borrow 77% more from the bank than you could in 1991. That's a homebuyer-friendly statistics if there ever was one.
Buying a home is a relative bargain in 2011.
Get A Look At Today's Mortgage Rates
When mortgage rates are low, they rarely last. And with both the Federal Reserve and Congress expected to add stimulus to the economy, the window for low rates is closing quickly.
For now, rates are ripe for picking. 30-year fixeds, 15-year fixeds, and 5-year ARM are all very low.