The ups and (mostly) downs of the housing market, combined with tax incentives have left many wondering whether or not now might be a good time to finally buy that dream home. Average interest rates on thirty year mortgage loans have plummeted once more, falling a full percentage point below the lowest rate at any time last year. According to Yahoo! Finance, the average thirty year mortgage rate is now a pavement-scraping 4.78%. That’s down from 4.83% just last week, and it matches the record low set in April of this year. Putting the numbers into further perspective, Freddie Mac reports the average 30 year rate at this time last year was 5.97%.
Thirty year mortgage rates were not the only ones to drop this week. Average rates on fifteen year fixed mortgages also sank, from 4.32% last week to 4.29% this week. That’s the lowest 15 year fixed mortgage rates have been since statistics were kept on them beginning in 1991. Additionally, five year, adjustable-rate mortgages saw their average rates fall to 4.18% this week from 4.25% last week. One year, adjustable rate mortgages held steady at 4.35% for the second week straight.
2711097891_952dd3025b
(Daryl Davis)
The rapid fall can be traced back to last November, when the Fed began its gigantic $1.5 trillion shopping spree of toxic, mortgage-backed securities to lower lending rates. By and large these efforts have succeeded, as rates have hung around the 5% neighborhood since April and triggered a flurry of mortgage refinancing. According to Freddie Mac chief economist Frank Nothaft, a homeowner who refinanced today would stand to save about $100 per month on a $200,000 fixed-rate mortgage.
On the surface, the falling rates discussed above seem to bode well for the struggling housing market. But according to the Wall Street Journal, refinancing activity may be slowing to a crawl. In the week ending November 20, refinancings reportedly fell 9.5% in spite of falling rates. The Journal also states that the “overall pace of mortgage applications also dropped in the week ended Nov. 13, down 2.5%.” It appears that the housing market’s problems may run too deep for low interest rates to correct, at least presently.
Source: http://www.mint.com/blog/goals/scraping-pavement-mortgage-rates-hit-new-lows/
Thirty year mortgage rates were not the only ones to drop this week. Average rates on fifteen year fixed mortgages also sank, from 4.32% last week to 4.29% this week. That’s the lowest 15 year fixed mortgage rates have been since statistics were kept on them beginning in 1991. Additionally, five year, adjustable-rate mortgages saw their average rates fall to 4.18% this week from 4.25% last week. One year, adjustable rate mortgages held steady at 4.35% for the second week straight.
2711097891_952dd3025b
(Daryl Davis)
The rapid fall can be traced back to last November, when the Fed began its gigantic $1.5 trillion shopping spree of toxic, mortgage-backed securities to lower lending rates. By and large these efforts have succeeded, as rates have hung around the 5% neighborhood since April and triggered a flurry of mortgage refinancing. According to Freddie Mac chief economist Frank Nothaft, a homeowner who refinanced today would stand to save about $100 per month on a $200,000 fixed-rate mortgage.
On the surface, the falling rates discussed above seem to bode well for the struggling housing market. But according to the Wall Street Journal, refinancing activity may be slowing to a crawl. In the week ending November 20, refinancings reportedly fell 9.5% in spite of falling rates. The Journal also states that the “overall pace of mortgage applications also dropped in the week ended Nov. 13, down 2.5%.” It appears that the housing market’s problems may run too deep for low interest rates to correct, at least presently.
Source: http://www.mint.com/blog/goals/scraping-pavement-mortgage-rates-hit-new-lows/
