U.S. 30- and 15-year mortgage rates fell to fresh lows in the past week amid concerns about the state of the economic recovery, according to a survey released on Thursday by Freddie Mac, the second-largest U.S. mortgage finance company.
Interest rates on U.S. 30-year fixed-rate mortgages, the most widely used loan, averaged 4.56 percent for the week ended July 22, down from the previous week’s 4.57 percent and its year-ago level of 5.20 percent, according to the survey.
Rock bottom mortgage rates offer a glimmer of hope for a housing market that has been struggling to gain traction since the expiration of popular home buyer tax credits several months ago.
Freddie Mac started the survey in April 1971.
Meanwhile, 15-year fixed-rate mortgage averaged 4.03 percent, down from 4.06 percent last week, the lowest since Freddie Mac began surveying this type of loan in 1991.
With interest rates dropping to their lowest since Freddie Mac started the survey, home loan refinancing activity should continue to show strength and demand for loans to purchase a home may gain traction.
“The decline in mortgages rates over the past few weeks echoes the recent signs of weakening confidence in the strength of the economy, particularly the housing and consumer sectors,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.
Mortgage rates are linked to yields on Treasuries and yields on mortgage-backed securities.
“With interest rates dropping to their lowest since Freddie Mac started the survey, home loan refinancing activity should continue to show strength and demand for loans to purchase a home may gain traction.”
Let’s get real. With most of us who refinanced in 2009, because the President said it was the right thing to do, being put through the wringer by the underwriters, we aren’t going to do it again. We now know that having “Quick Approved” status with your existing lender for having paid on time for 15 years meant nothing.
With regard to purchasing, if people don’t have jobs, or they ruined their credit rating on the last underwater loan, they aren’t purchasing either. People with discretionary money are probably waiting for either mortgage rates or house prices to go down further. The buyer, if any, has plenty of choices. Your average homeowner only has one house to sell.
I do see, however, that the “no closing costs,” “we’ll keep financing your mortgage” huckster is back on the radio, after an 18 month hiatus, so maybe that is the leading indicator. I wonder how he did on his promise when the market froze.
I’ll tell you how the huckster did…..I refinanced through Mr. Sibley’s firm Lenox financial out of Atlanta. I closed on a re-financed mortgage of $125,000 and paid the same closing costs there if not more than another place of my choosing. They are middle men. All they do is shop around for your moirtgage which you can do yourself. I have no complaint with the people that handled all the required paper work. The closing costs were high. My credit rating was over 780 as well.
Do not be fooled, the closing costs are in there some where.
My advice…..Find your own mortgage backer. I sent them a note recently about their tactics …they did not respond.