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30-Year Fixed Rate Hits New Low

|Includes: Freddie Mac (FMCC), FNMA, NLY

This morning Freddie Mac released information showing that 30-Year Fixed Rate Mortgages hit all-time lows, never before seen. Freddie reports:

  • 30-year fixed-rate mortgage (NYSE:FRM) averaged 3.62 percent with an average 0.8 point for the week ending July 5, 2012.
  • 15-year FRM this week averaged 2.89 percent with an average 0.7 point.

In comparison, mortgages originated in October of 1981 had rates over 18%. A $200,000 FRM with a 3.62% rate would have a monthly payment somewhere around $1,200. A $200,000 FRM with an 18% rate would have a mortgage payment around $3,300.

As the Fed extends Operation Twist, consumers should continue to benefit from this historical rate cut and stimulus.

Disclosure: I am long OTCQB:FMCC, OTCQB:FNMA.

Additional disclosure: Long GSE preferreds.