Mortgage Rates Fall
Mortgage Rates Fall
Mortgage giant Freddie Mac reported Thursday that mortgage rates fell this week, with the average rate for a 15-year fixed mortgage, a popular option for refinancing, dropping to its lowest level in twenty years. The 15 year loan averaged 3.54 percent for the week, down from 3.66 percent the previous week, and the lowest average since Freddie began tracking it in 1991. The average rate for a 30-year fixed loan, meanwhile, fell from 4.55 percent to 4.39 percent.
US mortgage rates tend to follow the yield on the 10 year Treasury note, which has fallen in recent weeks as uncertainty over the economy has prompted investors to pull money from stocks and invest in bonds, which are generally viewed as safer investments. The shift to bonds has pushed their yields to their lowest levels of the year, and interest rates have dropped as a result. Bond yields fall as higher demand drives their prices up.
Disappointingly, low mortgage rates and rock-bottom home prices have not sparked a rebound in the housing market. Sales of existing homes fell to a seasonally adjusted annual pace of 4.77 million in June, the third straight month sales have fallen. Sales are on pace to surpass lat year's total of 4.91 million for the weakest sales year since 1997. According to most economists, a healthy economy would see about 6 million sales a year or more.
The nation's continued high unemployment rate, combined with strict lending standards, are likely to keep the market depressed at least through the end of the year, economists warn. With banks requiring higher credit scores and down payments, many potential buyers simply can't obtain financing to buy a home. Furthermore, many are hesitant to buy because of fears of how much further prices will drop.
La Jolla Real Estate
Colorado Springs Townhomes
Real Estate News
Mortgage giant Freddie Mac reported Thursday that mortgage rates fell this week, with the average rate for a 15-year fixed mortgage, a popular option for refinancing, dropping to its lowest level in twenty years. The 15 year loan averaged 3.54 percent for the week, down from 3.66 percent the previous week, and the lowest average since Freddie began tracking it in 1991. The average rate for a 30-year fixed loan, meanwhile, fell from 4.55 percent to 4.39 percent.
US mortgage rates tend to follow the yield on the 10 year Treasury note, which has fallen in recent weeks as uncertainty over the economy has prompted investors to pull money from stocks and invest in bonds, which are generally viewed as safer investments. The shift to bonds has pushed their yields to their lowest levels of the year, and interest rates have dropped as a result. Bond yields fall as higher demand drives their prices up.
Disappointingly, low mortgage rates and rock-bottom home prices have not sparked a rebound in the housing market. Sales of existing homes fell to a seasonally adjusted annual pace of 4.77 million in June, the third straight month sales have fallen. Sales are on pace to surpass lat year's total of 4.91 million for the weakest sales year since 1997. According to most economists, a healthy economy would see about 6 million sales a year or more.
The nation's continued high unemployment rate, combined with strict lending standards, are likely to keep the market depressed at least through the end of the year, economists warn. With banks requiring higher credit scores and down payments, many potential buyers simply can't obtain financing to buy a home. Furthermore, many are hesitant to buy because of fears of how much further prices will drop.
La Jolla Real Estate
Colorado Springs Townhomes
Real Estate News
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