Mortgage interest rates continued to inch downward during the week ended April 23 and long term fixed rates are now an out-and-out better deal than ARMs from day one.

Freddie Mac's weekly Primary Mortgage Market Survey released this morning reported that the 30-year fixed-rate mortgage (FRM) averaged 4.80 percent with an average of 0.7 point for the week compared to 4.82 percent with 0.6 percent during the week ended April 16.  The 30-year reached an all time low of 4.78 percent during the week ended April 2.

The 15-year FRM was unchanged this week, remaining at 4.48 percent.  For two week in a row this rate has been at the lowest level in the 19 years Freddie Mac has tracked the 15-year FRM.  Fees and points increased from 0.6 during the week of April 16 to 0.7.

Five year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) had an average contract interest rate of 4.85 percent with 0.6 point, down from 4.88 percent also with 0.6 point a week earlier.  This is another new low for the hybrid which Freddie Mac began to report on in January 2005.

One-year Treasury-indexed ARMs averaged 4.82 percent, a decrease of 9 basis points from one week earlier.  Fees and points dropped from 0.7 to 0.4.

With long-term fixed rates now cheaper than variable rate mortgages it is hard to imagine who is signing up for them.  And indeed few are.  The Mortgage Bankers Association reported on Wednesday that ARMs represented only 1.4 percent of all mortgage applications during the previous week.

Frank Nothaft, Freddie Mac vice president and chief economist commented on the survey; "Although long-term mortgage rates eased slightly this week, ARM rates remain elevated relative to those fixed-rate mortgages. For instance, interest rates for 1-year ARMs exceeded those for 30-year fixed-rate mortgages over the last two weeks; this is the first time this has happened since Freddie Mac began collecting data for ARMs in January 1984. 

"The housing market is showing further signs of possible improvement.  House prices rose for the second consecutive month in February, the first back-to-back increase since April 2007, according to the Federal Housing Finance Agency.  Among the nine Census divisions, six experienced positive gains in February, led by a monthly increase of 3.8 percent in the Pacific Division."

Fannie Mae reported its weekly yields for the week ended April 17 on Monday. 

The conventional 15-year FRM was unchanged from the previous week at 4.07 percent while the 30-year FRM increased slightly from 4.39 percent to 4.40 percent.

Government guaranteed FHA and VA loans had an average yield of 5.53 percent compared to 5.52 percent a week earlier and one-year ARMs averaged 3.35 percent, down from 3.44 percent.

All Fannie Mae rates are quoted net of servicing fees.