Interest rates on the 30-year fixed-rate mortgage dropped to an average of 5.10 percent for the week ending Wednesday, down from the previous week’s 5.14 percent, Freddie Mac said.

“Interest rates for 30-year fixed-rate mortgages fell for the ninth straight week and represented a third consecutive all-time record low since Freddie Mac’s survey began in April 1971,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

Mortgage rates have dropped dramatically ever since the Federal Reserve unveiled a plan last month to buy up to $500 billion of mortgage securities backed by government-sponsored enterprises, Fannie Mae, Freddie Mac, and Ginnie Mae. The program also entails buying up to $100 billion of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.  The Fed on Tuesday moved forward aggressively with an effort to drive down mortgage costs, setting a goal of buying $500 billion in mortgage-backed securities by mid-2009.

What does this mean for you, the consumer?  If you are in the market for a home, it is the most wonderful news you could ask for.  A 30 year fixed rate of 5.10 per cent means that you could buy a $200,000 home for an average monthly payment under $1100 a month! Want to finance about $220,000, then you are right at $1200 a month. Now that is something to get very excited about.  Call Vicki at Cool Houses Austin for more details (512-665-7778).