30-year fixed mortgage rates went below the rate of short-term adjustable rate mortgages. That means, for the moment at least, a long-term loan may be cheaper in the short run than its adjustable rate.
More than anything else, it shows the current unpopularity of adjustable rate mortgages, which have been blamed for playing a major role in the current foreclosure crises and collapse of the housing market by enticing borrowers into buying bigger home than they really could afford. Other homeowners with ARM who planned on refinancing when their rates changed have had difficulty doing so because of collapsing housing prices put them "underwater" on their mortgage, owing more than the house is worth and making them poor candidates for a refinance.
As a result, investors are increasingly reluctant to invest in adjustable rate mortgages. And with strong demand due to low interest rates and home prices, lenders have little incentive to offer even lower temporary rates as an incentive to attract any customers.
