The average 30 year fixed rate for January 19th, 2012 is 3.88%. According to the Primary Mortgage Market Survey (PMMS), published by Freddie Mac this is the lowest since the inception of the survey in 1971.

To gain an understanding of what this low interest rate means, you have to think about what it translates into based upon a particular loan amount. To keep things simple, I will use a loan amount of $100,000 for this example. At a fixed interest rate of 3.88% on a 30 year loan, the payment is $471 per month.

If you compare this to the 7.00% interest rate in January of 2002 (10 years ago) you would have had a payment of $665 per month for a $100,000 loan.

Going back even further, to January 1982, the interest rate was 17.48% which translates to $1,465 per month for a $100,000 loan.

These super low interest rates and the huge drop in home prices makes right now a great time to buy. In many cases, rental costs are higher than the cost to own.