Mortgage rates hit a record low

As reported by Les Christie from CNN, just one day after President Obama detailed a proposal to enable millions of homeowners to refinance to record-low mortgage rates, those rates notched another record.

The 30-year, fixed rate fell to an average of 3.87% and the 15-year fixed dropped to 3.14% for the week ending February 2, both the lowest rates ever recorded in the 40-year history of the Freddie Mac Primary Mortgage Market Survey.

Frank Nothaft, vice president and chief economist at Freddie Mac said the rates fell to new lows after the fourth quarter gross domestic product report last week showed that the economy was growing at a rate that fell short of expectations.

The new record rates were “fortuitously timed” for the Obama administration to announce its latest refinancing proposal, said Greg McBride, senior financial analyst at Bankrate.com.

The plan, which requires approval by Congress, would allow borrowers who are current on their mortgage to save an average of $3,000 a year by refinancing into loans backed by the Federal Housing Administration.

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