Lowest Mortgage Rates Meet Almost Lowest Mortgage Applications this Week

Current Mortgage Rates Nudging All-Time Low

How many times recently have you read that today's mortgage rates are at or near historic lows? For weeks now, the news has been the same: a very slight drop in the benchmark 30-year, fixed rate home loan rate as it inches--although hardly perceptibly--toward that 4.78% all-time low that was set back in April of this year.

Well, guess what? Nothing's changed. Freddie Mac reports that that benchmark mortgage loan rate is down to 4.83%. And if last week's drop of 0.05% is repeated this week, that April record will be matched.

Lowest Mortgage Rates Compared to What?

But just how low is that all-time low? Freddie Mac has kept records since 1971, and it's worth revisiting some of the last 38 years' highs. These are the average rates for each selected year for a 30-year, fixed-rate mortgage:

• 1973 8.04%
• 1974 9.19%
• 1975 9.05%
• 1978 9.64%
• 1979 11.20%
• 1980 16.63%

Nearly 17% is as bad as it gets. But that's bad enough. The hope is that among those who took out such a 30-year mortgage 29 years ago there's no one who hasn't refinanced since.

How About More Recently?

Mortgage loan rates drifted down throughout the 1980s, but by 1990 were still at 10.13%. The '90s saw a continuing downward drift--with an occasional blip year--and in 2000 they were at 8.05%. That's still not far off twice as high as current mortgage rates.

In 2006, the average rate was 6.41%, and last year it was 6.03%.

Home Refinance and Purchase Applications Down

Is it because people have forgotten just how expensive home loans usually are that mortgage applications--both for new purchases, and refinancing--are so low? The Mortgage Bankers Association reports that, last week, applications for home purchase loans were at a 12-year low.

Of course, all too many Americans have been hurt by the recent recession, and have damaged credit scores, and negative equity. But what about the rest?

Just what are they waiting for? Do they think that rates are going to continue to drift downwards? Few experts think that they'll go much lower, and--even if they do inch down some more--any resulting savings are likely to be wiped out by recovering real estate prices.

Compare Mortgage Rates Now

If you're holding out for an even lower mortgage quote, you may well be making a mistake. Do yourself a favor, and compare mortgage rates in your area now.