Mortgage Rates Update: Mortgage Rates Hit New Record Lows

According to the Mortgage Bankers Association (MBA)s recent Weekly Mortgage Applications Survey for the week ending on October 1st, application for mortgages purchase homes rose 2.4 percent last week in comparison to the previous week on a seasonally adjusted basis.

Jay Brinkmann, MBA’s chief economist, stated that the increase in purchase activity was led by a 17.2 percent increase in FHA applications, and noted that the conventional purchase mortgages saw an increase of 3.6 percent for the week. All in all, these types of mortgages rose 9.3 percent, while refinances dropped 2.5 percent.

Government and private mortgage lenders have increased standards due to the tough economy. A lot of banks and financial firms are planning to reduce their risk, meaning consumers with an ability to pay their mortgages on time have higher chances to acquire a loan.

Meanwhile, the agency said the interest rates for 30-year fixed and 15-year fixed mortgages fell once again last week to new record lows. The average 30-year fixed mortgage rate fell to 4.25 percent from 4.38 percent and the 15-year decreased to 3.73 percent from 3.77 percent.