Tuesday, August 9, 2011 at 3:17 p.m.
Rates for certain home loans have fallen to new 2011 lows as bond yields continued dropping.
Real estate website Zillow.com on Tuesday reported the 30-year fixed mortgage averaged 4.14 percent, down from 4.19 percent during the same time last week. The site's home-loan records, which date back to 2008, showed the previous low was 4.07 percent in November 2010.
"Given the mental association of credit ratings with bond rates, many people initially think about the impact of the downgrade on mortgage rates," said Zillow Economist Stan Humphries, in a statement. "But that’s probably not where the initial damage will be felt. In fact, near-term, expect almost zero impact on mortgage rates."
Also on Tuesday, California Housing Finance Agency (CalHFA) announced it decreased interest rates to lenders in its FHA loan program. That happened after bond yields hit record lows, following the Federal Reserve's decision to extend its low interest rate policy for two more years.
Zillow’s rates are based on thousands of mortgage quotes turned in daily from borrowers through the site.
The website also breaks down reported rates by state. It said the average 30-year fixed rate in California has been "stable" at 4.14 percent this week, down from 4.22 percent the previous week.
The lowest rate was 4.08 percent in North Dakota and the highest, 4.38 percent, was in Hawaii.
Standard & Poor's decision to downgrade government enterprise Fannie Mae and Freddie Mac on Monday has raised concerns about what that will mean for consumers.
San Diego Association of Realtors President Bob Kevane said that move will make it costlier for the mortgage giants to do business, likely leading to higher mortgage rates for consumers. However, that likely won't happen immediately Kevane said.
Even when if rates do increase, "I don't think it's going to change rates much," Kevane added.
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