Mortgage Interest Rates Rise
Mortgage rates on 30-year home loans rose last week and were poised to go higher as investors demanded higher rates for long-term government debt, which is closely tied to FHA mortgage rates.
Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages rose to 4.91 percent from an average of 4.82 percent the previous week. Rates in Freddie Mac’s survey have been below 5 percent for more than two months. If they rise higher, that will diminish the appeal of refinancing for many borrowers.
The yield on the Treasury’s 10-year note - a key benchmark for home mortgages and other kinds of loans - reached its highest level since November earlier this month. The worry is that rising bond yields could drive mortgage rates higher and also increase the cost of borrowing for businesses. That could short-circuit the nation’s efforts to emerge from a deep recession and the worst housing crisis in decades.
The average rate on a 15-year fixed-rate mortgage rose to 4.53 percent last week from 4.5 percent the previous week, according to Freddie Mac.
Interest rates on five-year adjustable-rate mortgages inched up to 4.82 percent from 4.79 percent while rates on one-year adjustable-rate mortgages fell to 4.69 percent from 4.82 percent.
The mortgage rates do not include points. The nationwide fee averaged 0.7 of a point last week for 30-year and 15-year mortgages, and 0.6 of a point for five-year and one-year adjustable rate loans.
Mortgage Loan Applications Increased as Interest Rates Rose
Bloomberg reported this week that mortgage loan applications in the U.S. gained last week, helped by affordable mortgage rates that enticed homeowners to seek mortgage refinancing. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan rose 2.3% to 915.9 in the week ended May 15th, from 895.6 the week before. The group’s refinancing gauge increased 4.5%. The average rate on a thirty-year fixed mortgage loans fell for the second straight week and was near the record low reached at the end of March.
Lower borrowing costs, supported by an increase in Federal Reserve purchases of longer-term securities, and reduced prices are boosting mortgage rates for home refinancing and purchases of homes and may help settle the slumping housing market. “The broader housing market certainly looks to be stabilizing,” Zach Pandl, an economist at Nomura Securities International Inc. in New York, said before the report. “Home loan applications responded very well to the Fed’s purchases of Treasuries and mortgage-backed securities.” The mortgage bankers Association reported that their mortgage refinancing gauge rose to 4,794.4, from 4,588.6 the previous week. The purchase index fell 4.4% to 254 last week, from 265.7 the week before. The share of applicants seeking to refinance loans rose to 73.6% of total applications last week from 71.9%.
Mortgage Interest Rates Dropping
With the government committed to buying troubled mortgage assets, lenders and banks are more comfortable extending credit with low rate home mortgages. FHA mortgage rates and interest rates for new home financing continue to see lending reports indicating the lowest rates in fifty years.
Will Mortgage Interest Rates Drop Further?
CBS News contributor Ray Martin discusses mortgage interest rates, loss mitigation and he addresses other financial questions about the stimulus package and the housing industry.
Treasury Secretary Tim Geithner said in a press conference “Just as this administration has intensified our efforts to help American homeowners, those who would seek to prey on the most vulnerable are intensifying their tactics as well, often through mortgage relief scams and foreclosure prevention companies,” at an announcement in Washington. “These are predatory home mortgage schemes designed to steal Americans of their savings and potentially their homes.”
Mortgage Rates Decline as Refinance Applications Rise
Low mortgage rates continue to stimulate refinancing activity and the Obama administration hopes to encourage more first time buyers to seek financing to jump-start the struggling housing markets. Mortgage refinance applications jumped last week, as low mortgage interest rates fueled the increased refinance activity. The Mortgage Bankers Association said Wednesday its weekly application index climbed 21.2 % for the week ended March 13.
KMG Publisher, Jason Cardiff told Mortgage Related News that he anticipates that the FHA mortgage rates could decline to 4.5% or even 4.25%. Cardiff said, “Obama is serious about reviving the cash flow for homeowners on Main St. and the Federal Reserve made another move to pump more blood back into the housing sector.”
The index was 876.9, up from 723.4 a week earlier, the trade group said. Almost 73% of mortgage applications came from borrowers seeking to mortgage refinance loans at reduced interest rates, not home buyers. The lending survey provides a snapshot of mortgage lending activity involving mortgage bankers, commercial banks and thrifts. It covers about half of all new residential home loans made each week. An index value of 100 is equal to the application volume on March 16, 1990, the first week the association tracked it.
Mortgage Interest Rates Drop
Mortgage interest rates dropped based on news that the Federal Reserve has bought a total of $217 billion in securities that were mortgage backed, according to market researcher Wrightson ICAP . The Federal Reserve in New York jumped into that market and started buying debt sold off by the big mortgage finance companies that included Fannie Mae, in January.
The Federal Reserve in New York jumped into that market and started buying debt sold off by the big mortgage finance companies that included Fannie Mae, in January. It also started buying the mortgage-backed securities bundled by the agencies.
Both steps positioned the Fed as buyer in secondary mortgage markets that had seized up but are vital to enabling lenders to make new home loans. Mortgage lenders sell many of their loans to institutional investors, and higher rates charged by these investors to hold pooled bad credit mortgages make it harder for originators to offer lower rates on new mortgage loans. Conventional and FHA mortgage rates were both slightly lower than the previous week.
In a sign that the purchases are driving down rates and encouraging private investors to also step in, the gap’s dropped in just a few months between Treasuries and the interest rates that the agencies and mortgage-backed securities have to carry to make them attractive. Yields on mortgage-backed debt dropped to 0.87 of a percentage point more than Treasuries, down from 1.90 points in December, and are near the lowest seen since late in 2007, according to a Merrill Lynch index. Request mortgage rate updates for home financing with Fannie Mae, Freddie Mac and FHA interest rate updates online.
Mortgage Rates Holding Steady
The 30-year fixed rate rests at 5.41% as President Obama unveils foreclosure prevention program.
o Current Mortgage Rates
o 30 yr fixed mortgage5.17%
o 15 yr fixed mortgage4.78%
o 30 yr fixed jumbo mortgage6.92%
o 5/1 ARM 4.80%
o 5/1 jumbo ARM 5.33%
Mortgage rates remained flat last week, as President Obama unveiled a $75 billion plan to help prevent foreclosures. The average 30-year fixed mortgage stayed constant at 5.41% for the week ended March 4, according to Bankrate.com.
The average jumbo 30-year fixed rate reached the lowest level in nearly two years, slipping to 6.77% from 6.87%. The average 15-year fixed rate mortgage ticked up to 4.94% from 4.93%.
Adjustable rate home loans fell, with the 1-year ARM pulling back to 5.43 from 5.58%; the 5/1 adjustable-rate mortgage decreasing to 5.39% from 5.40%.
Mortgage rates are continuing their sideways movement, though they may tilt higher as long-term concern grows regarding how the government will manage its growing budget deficit, according to Weiss Research analyst Mike Larson. “Mortgage interest rates are moving sideways with an upward bias. There are some concerns for how we’ll pay for the stimulus and everything else. And despite the dismal economic news the market is getting, there’s some concern about supply overshadowing that, and that’s impacting bond prices,” Larson said.
President Obama’s $75 billion foreclosure prevention program went into effect Wednesday. The Homeowner Affordability and Stability Plan will help more homeowners refinance into new, low-interest rates and it provides incentives to mortgage lenders and servicing companies to restructure mortgage balances and renegotiate mortgage rates.
Borrowers Reject Adjustable Rate Mortgage Loans
American homeowners have lost their appetite for once appealing adjustable rate mortgages. A quarterly report from Freddie Mac indicated that 97% of prime borrowers who refinanced adjustable rate mortgages last quarter chose fixed rate mortgage loans. In addition, 99.7% of homeowners who refinanced fixed-rate home loans last quarter chose fixed-rate mortgages again.
The number of homeowners choosing adjustable rate refinancing was significantly lower than the third quarter. “The very low interest rates for fixed-rate loans compared with ARM mortgage rates in the fourth quarter, combined with worries that rates may rise in the future when the economic recession ends, enticed refinancing borrowers to seek the security of long-term fixed-rate mortgages,” said Freddie Mac chief economist Frank Nothaft in a statement. “When borrowers can lock in a rate of 5% or less for 15 years or longer, it’s hard to find a reason not to take it.”
During the fourth quarter, initial interest rates on hybrid adjustable-rate mortgages were close to, or above mortgage interest rates on 15-year and 30-year fixed rate home mortgages. Last week, Freddie Mac reported the average 30 year fixed-rate mortgage had dropped to 5.04 %, down one full percentage point from where thirty-year mortgage loans were a year ago.
Low Mortgage Rates Forecasted
Mortgage interest rates will remain below 5% for the firstpart of 2009 which could hellp stabilize home sales and keep a mortgage refinancing trend going, according to a consensus forecast by banking economists. “A surge of home loan refinancing is already under way and lower home prices and interest rates will gradually support an increase in home sales,” said Bruce Kasman, chief economist at JPMorgan Chase.
Mr. Kasman is chairman of the American Bankers Association Economic Advisory Committee, which expects the government’s efforts to stabilize the financial system and stimulate the economy will lead to a recovery in the second half with gross domestic product rising to 3.8% in the 4th quarter of 2009. However, the bank economists see house prices continuing to decline and home loan delinquencies increasing throughout 2009. The home refinancing surge will be “substantial,” predicted Mr. Kasman, noting that a high rate of applications may be rejected and cash out refinance loans will be modest.
Mortgage Rates Rise, Home Refinancing Applications Decline
Unfortunately, not that many homeowners qualify for the low conventional mortgage rates that dipped below 5% a few weeks back. Even FHA home loan programs have experienced changes that require higher credit scores and more equity. Many rejected borrowers remain in search for mortgage modification plans with loan modification agreements that enable existing mortgages to be renegotiated without actually refinancing the mortgage.
Refinancing applications hit their highest levels in years after mortgage rates plummeted to record lows several weeks back, according to the Mortgage Bankers Association. But now that thirty-year fixed rate mortgages have pushed back above 5 %–to still attractive levels–interest in mortgage refinancing appears to be declining.
The Mortgage Bankers Association released its Weekly Mortgage Applications Survey for the week ending January 23, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 732.1, a decrease of 38.8% on a seasonally adjusted basis from 1195.3 one week earlier…
Mortgage interest rates remain at the lowest point in decades and Investment Advisor Jill Schlesinger spoke to Harry Smith about the right time for home-buying.
Home Prices Fall Again Even with Low Mortgage Rates
The Home Refinancing Index declined 48% to 3373.9 from 6491.8 the previous week and the seasonally adjusted Purchase Index decreased 2.9 % to 294.3 from 303.1 one week earlier…The refinance share of mortgage activity decreased to 72.8% of total applications from 83.3% the previous week…The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.22% from 5.24%, with points decreasing to 1.05% (including the origination fee) for 80% loan-to-value (LTV) ratio loans.
Mortgage Interest Rates May Reduced by the Fed Again
The mortgage industry has been awaiting some good news and Michigan homeowners have been waiting out the present state-wide housing slump that could receive a big boost, particularly for those looking to refinance. If you thought mortgage rates couldn’t fall any further, think again. Some economists expect the Federal Reserve to reduce current mortgage interest rates as low as 3.85 %. That would be truly amazing. I don’t know if mortgage rates have ever been that low,” said Amanda Crews, the housing director at Metro Housing in Flint.
Fed Cuts Rates to Target Range of 0%-0.25%
Watch Roundtable Reaction to the Federal Reserve and Potential Mortgage Rate Cuts.
Currently, conventional home mortgages are being published below 5%. Just a few months back, they were in the low 6% range. A cut below four % could save home owners a ton of cash. “One thousand dollars a year for every point for a $100,000 loan — two points. That would save a borrower $200 a month after refinancing a $100,000 mortgage loan.”
The average rate on 30-year fixed mortgage loans rose last week to 5.12 %, from a record low of 4.96 % a week earlier, according McLean, Virginia-based Freddie Mac. After the Federal Reserve announced plans to buy $500 billion of bad credit home loan security bonds, rates fell from 6.46 % in October, about tripling the pace of home loan applications between the four weeks ended Jan. 16 and Nov. 21, according to the Mortgage Bankers Association. If mortgage lenders introduced even lower rates, they would not be able to handle the resulting surge in applications, Heiden said. “As mortgage interest rates improve, volume increases,” she said.
Lowest Mortgage Rates of All Time?
The current mortgage rates pulse posts interest rates online for conforming, FHA loans, home equity loans and refinancing. We guarantee the lowest rates and best loans around. The Federal Reserve reduced key rates to the lowest levels of all time.
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Treasury Down After Bernanke Says Fed May Buy US Debt
Treasury prices declined Tuesday as yields moved higher, with bond traders playing off Federal Reserve chief Ben Bernanke’s comments restating that the U.S. central bank could buy longer-term Treasury’s to keep loan rates low. Last week, mortgage rates dropped below 5% on thirty year mortgage loans and FHA home loans.
More aid to the banking system would be needed to foster an economic recovery, Bernanke also said in a speech he delivered in London. Two-year note yields (UST2YR) rose 4 basis points to 0.79%. A basis point is one one-hundredth of a percent. Ten-year note yields (UST10Y) were little changed at 2.31%.
The timing and strength of any global recovery remain “highly uncertain,” Bernanke said. The Fed has begun a plan to buy billions of dollars in mortgage-backed securities and debt sold by housing agencies including Fannie Mae (FNM) and Freddie Mac (FRE) to lower mortgage rates and spur growth in the housing market.
So far, the program has been successful in bringing down mortgage interest rates by reducing the gap between Treasury’s is a benchmark for many types of home loans, and yields on mortgage or agencies bonds. Bernanke also said it may expand its program to buy asset-backed securities, which pool borrowings such as car loans and credit-card debt. Also Tuesday, a government report showed the U.S. trade deficit in November plunged to $40.4 billion, reflecting weakening demand for imports as the nation’s economic woes deepened
New York Fed Begins Purchasing Mortgage-Backed Securities
The Federal Reserve Bank of New York today began purchasing fixed-rate mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. Selected private investment managers are acting as agents of the New York Fed in these purchases. Summary data detailing these operations will be available on the New York Fed’s website beginning Thursday, January 8, 2009, and will be updated on a weekly basis each Thursday.
Get updated home loan guidelines and daily mortgage interest rates online. Many insiders believe that the Fed will continue to keep interest rates low for home purchase and refinancing through 2010, or when the housing markets recover.
This program, first announced on November 25, 2008, is intended to support the mortgage and housing markets and foster improved conditions in financial markets more generally. Read the original financial article>
2009 Mortgage Rate Forecast
In a recent home financing article written by Luke Mullins, he explores and declares “seven things you need to know about mortgage rates in 2009.” Just last year, most mortgage executives forecasted higher interest rates for mortgage loans in an effort to curb the growing fears of inflation. Of course declining home prices across the nation and emerging foreclosure crisis did play a significant role in the Federal Reserve slashing key interest rates consecutively. Mike Larson, a real estate analyst at Weiss Research said, “The preponderance of forces that would typically operate on mortgage rates—the economic backdrop, the inflation backdrop, and, in this case, government policy—are all pointing towards lower interest rates.”
Mortgage rates have become more alluring when the thirty-year mortgage loans featuring fixed rate terms dropped below 5.5%. VA and FHA mortgage rates continued to decline as well. This spurred an increase for both new home purchase and mortgage refinancing application volumes. Mullins examines the current mortgage rates while look forward into 2009 where many real estate financing experts anticipate more rate cuts and expanded FHA loan programs in an effort to stem the foreclosure crisis.
1. 2009 Rate Outlook: Thirty-year fixed mortgage rates should begin 2009 at around 5½ %, says Keith Gumbinger of HSH Associates. From there, they will “wax and wane” in the 5½-to-6 % range, before closing out the year somewhere between 6 and 6¼ %. “That’s still very attractive,” he says. “There is no reason to think that mortgage rates are going to go up so substantially so as to erode the marketplace.” Read complete article >
Five Smart Moves to Get the Best Mortgage Rates
According to a recent article from Interest.com, if you’re in the market for a home, there are five smart moves you can make to help you qualify for the cheapest possible mortgage. The tantalizing interest rates mortgage lenders put in their ads are for borrowers with the best credit scores, substantial down payments and the biggest gap between how much they earn and how much they owe each month.
Many home buyers will pay a lot more, but you don’t have to be one of them. With lenders demanding better credit scores, bigger down payments and lower debt-to-income ratios before they offer a mortgage, you have to improve your numbers. Plan ahead so that when you go for that home loan, you’re showing your best financial face. Every tenth-of-a-point is worth fighting for. Potentially, getting a lower mortgage rate could save you thousands of dollars a year. Read the complete article, 5 Smart Moves to Get the Best Rate.
Mortgage Rate Trend Has Mortgage Brokers and Homebuyers Salivating
Lead generation gurus, Mortgage Lead Vault posted a recent article quoting Kelly Media Group President, Jason Cardiff and his optimism of a mortgage rebound helping to boost home sale and ultimately property values in 2009. Cardiff points out that the note worthy efforts from the mortgage players like the Fed, FHA and Freddie Mac to reduce interest rates for home mortgages while make credit more available for mortgage refinancing and new home-buying.
The Real Estate Related News article quotes real estate mogul, Jason Cardiff, “2009 may see the housing sectors and mortgage markets rebound after all.” The trend of mortgage rates has made mortgage brokers and homebuyers salivate as interest rate rumors continue to speculate that 30-year rates may drop to 4.5%.Read the entire article > Jason Cardiff Remains Optimistic of 2009 Mortgage Rebound.
Fed Makes History by Cutting Interest Rates to the Lowest Level
The Federal Reserve stepped to the financial platform and announced key interest rates that reach historic levels. Mortgage lenders reported interest rates at 5% for mortgage refinancing and home financing. Many mortgage brokers believe the rumors are true that the government will induce lenders to offer mortgage rates in the 4.5% range.”
The Fed’s unprecedented move to further reduce its fed funds target rate to a range of 0 to 0.25% rather than a fixed point was a surprise. The move is an acknowledgment that interest rates in the marketplace had been well below the Fed’s 1% target, which it set at its previous meeting on October 29. The central bank also cut the lending rate for loans directly to banks. “Today was a reminder that the Fed was on the case,” said Jim McDonald, director of equity research at Northern Trust in Chicago. “It was a reaffirmation of their willingness to be very aggressive.” “What we heard today was not revolutionarily different but it was a reminder that they are committed to using their balance sheet to the fullest extent to repair the financial markets and stimulate the economy.”
Many analysts had expected the Fed would cut its fed funds rate to 0.5% from 1%. “In some senses the whole point of this meeting was to say ‘Quit watching interest rates, watch the other things that we can and will do,’” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland. Jack A. Ablin, chief investment officer at Harris Private Bank, said the fact that the Fed targeted a range for its fed fund rate indicates that policy makers did not want to bring the rate all the way to zero. Further rate cuts could have create problems with complications for money market funds, in which fees might outpace yields.
Lower Mortgage Rates Causing Spike in Home Loan and Refinance Applications
Since the Fed slashed rates and the Government agreed to buy bad home loans, mortgage news has dominated the financial circuits. As mortgage rates drop, local loan officers are seeing a big jump in the number of applications for mortgage refinancing and new home loans, mirroring a nationl phenomenon. Many consumers appear to be waiting eagerly on the sidelines for deeper mortgage rate cuts.
The Mortgage Bankers Association reported last week that its index of refinance applications has tripled. It’s the largest increase since 1990, when the organization began tracking the numbers. “I’m not sure it’s the biggest increase since 1990, but I’ve definitely seen an increase since last month,” said Barry Braverman of New Equities Mortgage Corp. in Capitola. Braverman estimated the number of applications in his office has possibly quadrupled in the past month.
Conforming mortgage rates have been the primary benefactor of the Federal Reserve’s industry bailout plan announced November 24th, according to HSH Market Associates, a national mortgage and consumer loan data company in New Jersey. The Federal Reserve committed to buying up to $600 billion of debt issued or backed by four major lenders: Fannie Mae, Freddie Mac, Ginnie Mae and Federal Home Loan.
Friday, HSH reported that the daily national average for thirty-year conforming mortgage loans was 5.33% — the lowest it’s been since the spring of 2004. “Mortgage borrowers, start your engines,” HSH posted on a company Web site blog.
Jumbo mortgage loan rates haven’t fallen as far or as fast, and continued credit-pricing issues still have to be worked out, according to the report, which said jumbo loans, while more affordable, cost on average 1.8 % more than a comparable conforming loan.
“If the lower rates are spurring you to action, you’re not alone; mortgage lenders everywhere are reporting a lot more activity than normal, which is remarkable given it’s the holiday season,” HSH reported. Last week, the average for a conforming thirty-year, fixed-rate mortgage loans slipped to 5.57 %, down from an October 15 recent peak of 6.7 % and well below the 6.06 % seen about two weeks ago, HSH reported. Since then, it’s slipped even more, according to local loan officers who report a 5.75 % on a no-point loan and about 5.25 % if the applicant is paying the point.
The number of new home loan applications has increased as well, according to several Santa Cruz County loan officers. The loans are increasingly involving more traditional sales rather than foreclosures or short-term investments, loan officers say. “It could be an interesting December and January,” Braverman said. Many of the inquiries aren’t from qualified applicants, however. “In many cases they can’t refinance because the value has gone down in their home or they’re not employed,” said Jesse Solomon of Watsonville Mortgage Co.
Josh Fischer, managing director of Sterling Pacific Financial in Watsonville, brokers prefer private investment deals rather than home mortgages. But he couldn’t help pointing out that he’d just seen a sub-5% loan on a thirty-year home loan for residential property. “The scenario there is, if you can qualify — and that box has shrunk incredibly — it’s some of the best money you can get.” For some, it still isn’t low enough. Rumors that rates could drop again to 4.5 % — a topic of discussion for the Treasury Department — are causing some people to wait and see. Jose Mendoza, a loan broker with Meyer Mortgage in Capitola, said loan officers in the office have probably doubled their production since last year. “We try to tell people it’s an excellent time to refinance,” he said. The important thing is to be ready, said Jim Chubb of Pacific Inland Home Mortgage. “The people who get those mortgage rates are the ones who are prepared.” Article written by Jennifer Pittman
Freddie Mac Reports 30-Year Mortgage Rate Average at 4-1/2 Year Low
Freddie Mac said Thursday that the 30-year fixed-rate mortgage loan average declined from a week ago to a four-and-a-half year low as bond yields declined. The thirty-year fixed-rate average was 5.47% with an average 0.7 point for the week ending December 11th, down from 5.53% a week ago. Last year the average interest rate was 6.11%. FHA mortgage rates dropped to 5.5% for the lowest FHA home loan rates in five years for 30 year home mortgages.
The thirty-year average has not been lower since March 25, 2004, when it averaged 5.4%, Freddie Mac said. “Following the release of the November employment report, which showed the largest monthly decline in jobs since December 1974, bond yields fell slightly this week allowing fixed-rate mortgage loans room to ease back a little further,” said Frank Nothaft, Freddie Mac chief economist, in a statement. Get the latest mortgage rate updates online.
Fed Considering More Interest Rate Cuts
Another issue, he said, is that Treasury’s plan would address only new home buyers, not those looking to refinance existing home loans. That could be impractical to implement, as well as unfair, to those homeowners stuck with mortgage loans at higher rates. “How can you separate purchase borrowers from refinance borrowers in terms of mortgage rates?” Mr. Cavin said. If the government directly buys loans extended for home purchases, it will create a two-tier market, said Mahesh Swaminathan, mortgage strategist at Credit Suisse. Refinancings “will occur in the regular market and possibly at higher interest rates,” he said. FHA home mortgages have been most supportive of the programs designed to help fight the foreclosure crisis. Steve Park of Mortgage Brokers Network said, “FHA home loan programs have become Main Street for brokers and lenders nationally. Park continued, “The good news is that any bit of lower rates will help everyone.” Read complete article > Fed Planning More Rate Cuts to Stimulate Mortgage Lending.
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