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 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.
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 >
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.
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