As fortune cookie-inspired as it may sound, one of my mother’s favorite sayings is “good fortune has nothing to do with luck.” She believes that the so called “lucky ones” are the kind of people that aren’t afraid to take advantage of the opportunities presented to them. And for new home buyers or owners looking to refinance, the current mortgage rates couldn’t be more enticing. Thirty-and 15-year fixed rates this week fell to their lowest levels since the spring of 2004, Freddie Mac reported last week.

Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. The company purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets.

Rate drop
The average rate on 30-year fixed mortgages tumbled 21 basis points in the last week, falling from 5.69 percent to 5.48 percent, while the average 15-year fixed mortgage dropped 26 basis points, from 5.21 percent to 4.95 percent. The last time the 30-year fixed was this low was March 25, 2004, at 5.4 percent. The 15-year fixed hasn’t been this low since April 1, 2004, when it averaged 4.84 percent.

Freddie Mac also announced that adjustable-rate mortgages (ARMs) fell sharply this week to lows not seen since 2005. The five-year Treasury-indexed hybrid ARM sank from an average 5.4 percent to 5.13 percent, and the average one-year ARM dropped from 5.26 percent to 4.99 percent.

In a statement published on Freddie Mac’s Web site, Frank Nothaft, the mortgage company’s vice president said: “When the Federal Reserve cut the target federal funds rate by three quarters of a percentage point, the action was extraordinary in both the magnitude and the timing of the rate cut: It is the largest cut since October 1984, and also the first time in more than six years that the Fed took such action outside of a scheduled Federal Open Market Committee meeting. The last time the Fed decided to ease the target federal funds rate in an unscheduled meeting was immediately after Sept. 11, 2001. As a result, mortgage rates continued trending down for the fourth consecutive week across loan products.”

Congressional stimulus package
Working with the industry’s mortgage giants, congressional leader’s last week struck an agreement on a stimulus package that includes a one-year rise in the loan limit for Fannie Mae and Freddie Mac, to $729,750. USA Today reported on Friday: “Currently, Fannie and Freddie can buy only mortgages that are $417,000 or less. Jumbo loans [those more than $417,000] have higher rates because they’re viewed as riskier for investors, and that’s hurt borrowers in places like California, where the median home costs about $489,000. The stimulus package also raises the dollar amount on loans insured by the Federal Housing Administration (FHA), which helps out first-time and working-income families, to $729,750 from $362,790. Congressional leaders hope that the plan will help millions of homeowners refinance to take advantage of the falling interest rates.