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Monday, October 17, 2011

How Low Can Rates Go?

The silver lining on our sluggish economic cloud is that mortgage rates are at a new record low.  Please see the following article and feel free to share with your clients.  For those looking to make a move, the time is NOW.

Bloomberg News – Mortgage Rates Fall to Lowest on Record, Freddie Mac Says – Lowest Since 1950s

Sept. 15 (Bloomberg) -- U.S. mortgage rates fell for a second week to the lowest on Freddie Mac records as a slowing economy and concerns that Europe’s debt crisis is worsening drove investors to the relative safety of Treasury bonds.

The average rate for a 30-year fixed loan dropped to 4.09 percent in the week ended today from 4.12 percent, Freddie Mac said in a statement today. That’s the lowest in the McLean, Virginia-based company’s records dating back to 1971. The average 15-year rate fell to 3.30 percent from 3.33 percent.

Yields on 10-year Treasuries, a benchmark for consumer loans including mortgages, are near all-time lows amid signs that the U.S. economic recovery has stalled and the euro region is struggling to contain its debt burden. Low borrowing costs have done little to improve the housing market as foreclosures mount and the unemployment rate remains above 9 percent.

Data from the National Bureau of Economic Research measuring Federal Housing Administration loans indicate that long-term borrowing costs are the lowest since the 1950s, according to Chad Wandler, a spokesman for Freddie Mac.

Mortgage applications rose for the first time in four weeks as rate declines encouraged purchases and refinancing, according to the Mortgage Bankers Association. A gauge of refinancing climbed 6 percent in the week ended Sept. 9, while the purchase index gained 7 percent, the Washington-based group said yesterday.
Please let me know if you have any questions or wpuld like to speak to a mortgage professional.

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