30-year mortgage rate holds at record low

@CNNMoney February 9, 2012: 12:37 PM ET

NEW YORK (CNNMoney) -- Rates on 30-year fixed mortgages remained at an all-time record low for the second week in a row.

The 30-year fixed rate held steady at an average of 3.87% for the week ending February 9, the lowest rate ever recorded in the 40-year history of the Freddie Mac Primary Mortgage Market Survey. That compares with the 5.05% rate recorded at the same time a year ago.

Meanwhile the 15-year fixed rate inched slightly higher to an average of 3.16%, up from the record 3.14% it set in the previous week. The 5-year Treasury-indexed adjustable rate mortgage and the 1-year Treasury-indexed adjustable rate mortgage also saw modest gains.

Frank Nothaft, vice president and chief economist at Freddie Mac, attributed the increases to last Friday's much better-than-expected jobs report. The report showed that the economy gained 243,000 jobs last month and the unemployment rate eased to 8.3% -- the lowest rate since February 2009.

"A strong January employment report added upward pressure to most mortgage rates this week," said Nothaft.

Nevertheless, the historically-low rates are great news for homeowners looking to refinance their mortgages -- a move many homeowners may soon be hoping to make. The same day Freddie's mortgage rate survey was released, federal and state officials announced a $26 billion foreclosure settlement with five of the nation's largest home lenders over charges of foreclosure made without proper paperwork and protocols, known as "robo-signing".

Foreclosure settlement: What it means for you

At least $17 billion of the settlement will go toward reducing the principal of mortgages held by homeowners who owe more on their home than it is worth and are behind on payments.

Another $3 billion will go toward refinancing mortgages for borrowers who are current on their payments -- offering them a chance to realize substantial savings on monthly payments.

Last week, the rate hit an all-time low after the fourth quarter gross domestic product report showed that the economy was growing at a rate that fell short of expectations.

Top 10 turnaround towns

Those new record rates were fortuitously timed for the Obama administration to announce its latest refinancing proposal, which aims to help millions of homeowners refinance. 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.  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
by Bankrate.com
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