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Mortgage rates drop to 41-year low

October 1st, 2012 Written By Carol Pawley

Blooming News reported, U.S. mortgage rates hit record lows today, following the Federal Reserve’s announcement earlier this month that it would be buying up mortgage-backed securities. The average rate for a 30-year fixed-rate loan fell to 3.4 percent, down from 3.49 percent;  the lowest since 1971, when Freddie Mac’s data begins. The average 15-year rate fell to 2.73 percent, another record low, down from 2.77 percent.

Anika Kahn, Wells Fargo senior economist told Bloomberg “ We’ve already seen low mortgage rates even before the Fed action. We’ll continue to see mortgage rates come down. That means affordability will continue to be high.”

Another indicator that mortgage rates may continue to drop is yields on bonds backed by mortgages have fallen even further than mortgage rates, allowing lenders to profit on mortgages at a record high rate.

How low do you think mortgage rates will drop to? Share your opinion below.

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