For the third time in 2009 mortgage interest rates hit a new record low according to results of Freddie Mac's Primary Mortgage Market Survey released this morning.

During the week ended March 26 the 30-year fixed-rate mortgage (FRM) averaged 4.85 percent.  This is the lowest level the 30-year has achieved in the lifetime of Freddie Mac's survey which began in 1971.  The rate was 13 basis points below the average rate for the week ended March 19.  Fees and points were unchanged at 0.7.

The 30-year FRM had established a new record low during the week ended January 8 and the record was broken again on January 15 when it hit 4.98 percent.  In the weeks since rates have moved over a relatively narrow range, hitting 5.25 percent in early February before starting back down again.

The 15-year FRM also established a new record low at 4.58 percent with 0.7 point.  Last week the average was 4.61 percent also with 0.7 point.  Freddie Mac has been tracking the 15-year FRM since 1991.   

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.96 percent this week, with an average 0.7 point, down from last week when it averaged 4.98 percent with 0.6 point.  This is again a record, the lowest rate for the 5-year hybrid since it was added to Freddie Mac's survey in January 2005.

Even though the one-year Treasury-indexed ARMs dropped 6 basis points to 4.85 percent with 0.6 point this week, it alone did not establish a new record.  The rate during the week ended March 19 was 4.91 percent with 0.7 point.

Frank Nothaft commented about the week, "The Federal Reserve's announcement that it intends to purchase Treasury securities over the next six months caused bond yields to drop and mortgage rates followed." Rates for 30-Yr FRMs peaked last year at 6.63 percent on July 24th.  With this week's 30-Yr FRM, the interest rate difference is almost 2 percentage points, which amounts to a savings of about $225 in monthly mortgage payments for a $200,000 loan.

"And potential homebuyers are taking notice of these historically low mortgage rates.  Both new and existing home sales rose 5 percent in February.  First-time homebuyers accounted for half of all existing home sales, according to the National Association of Realtors®.  In addition, mortgage applications for home purchases consecutively rose over the first three weeks in March, based on figures published by the Mortgage Bankers Association."

Earlier in the week Fannie Mae reported its yields for the week ended March 20.  Yields are quoted on a net basis and do not include servicing fees.

Yields on conventional 30-year FRMs dipped substantially, averaging 4.29 percent, compared to 4.59 percent for the week ended March 13.   The 15-year FRM was down from 4.24 percent to 4.09 percent.

Government guaranteed FHA and VA mortgages with fixed rates over a 30-year term had an average rate of 5.55 percent.  A week earlier the rate was 5.99 percent.

The rate for one-year ARMs was unchanged at 4.0 percent.