Mortgage Rates Continue to Fall
After hitting record lows last week, the average rates on 30- and 15-year fixed mortgages dropped again.
According to Freddie Mac, the rate on a 30-year mortgage fell from 4.01 last week to 3.94 percent this week.
Meanwhile, the average rate on a 15-year fixed loan fell from 3.28 to 3.26 percent.
Source: Associated Press
Read MoreFixed Mortgage Rates Hit Record Low
Average fixed rates for 30- and 15-year mortgages hit a record low this week, according to data released yesterday by Freddie Mac.
The average rate on a 30-year fixed-rate mortgage was 4.01 percent (0.7 point) for the week ending Sept. 29. That’s the lowest rate since the mortgage buyer began keeping records in 1971.
The rate is down from 4.09 percent last week and 4.32 percent a year ago. The lowest rates were in the nation’s West region, which recorded an average rate of 3.95 percent for the week.
Even lower was the average fixed rate on a 15-year mortgage, which was 3.28 percent (0.7 point). Economists say that’s the lowest rate ever for the loan. That’s just under last week’s 3.29 percent average, but well below 3.75 percent a year ago.
Meanwhile, interest rates for adjustable-rate mortgages were virtually unchanged.
Source: DSNews.com
Read MoreMortgage Rates and Points – Harold Smith – Episode #98
Harold Smith with Cornerstone Mortgage is back again to discuss mortgage rates and points. He will explain how they are tied together and some scenarios where “buying down a rate” can make sense…and when it does not.
For more info:
The Matteson Group
Coldwell Banker Apex, Realtors
214.405.3640
Your trusted real estate advisors providing a joy filled experience!
Here is Harold’s info:
The Harold Smith Team | Cornerstone Mortgage Company
5600 W. Lover’s Lane, Suite 204, Dallas, TX 75209
Toll Free: 1.877.890.5055 | Office: 214.350.5055 | Fax: 214.350.5008
Pre-Qualify Online: www.HaroldSmithTeam.com
E-Mail: harold@houseloan.com
FEDS CUT FUNDS RATE TO 3 PERCENT
The Federal Reserve earlier this week cut a key interest rate for the second time in just over a week, reducing the fed funds rate by a half point.
The Fed action pushed the funds rate to 3 percent. In a brief statement explaining their decision, Fed Chairman Ben Bernanke and his colleagues said that “financial markets remain under considerable stress.”
The rate cut marked the fifth time that the Fed has cut the funds rate since September.
Source: Associated Press
Read MoreAMOUNT, TIMING OF INTEREST RATE CUT SURPRISES EXPERTS
Experts with the Real Estate Center at Texas A&M University expected the federal funds rate to be cut, but they did not expect it to happen so soon or to be cut by so much.
“It reinforces the notion that the economy is either in or teetering on the brink of a recession,” said Dr. Jim Gaines, a research economist with the Center. “It will be interesting to see if comparable rates around the world are also lowered. If not, the value of the dollar could fall even further.”
The Fed cut the federal funds rate, the interest that banks charge each other on overnight loans, from 4.25 to 3.5 percent. This marks the biggest one-day move by the central bank in recent memory.
In a brief statement, the Fed said it decided to cut the federal funds rate “in view of a weakening of the economic outlook and increasing downside risks to growth.”
Mark Dotzour, the Center’s chief economist, said he does not think the rate cut alone will be enough to make a difference.
“The cut is a welcome first step, but it doesn’t address the main problem, which is the price of gas,” he said. “Three dollars per gallon is sucking the life out of the American consumer. The more money they put into their gas tanks, the less they have to spend in other areas.”
Dotzour said the Feds need to cut short-term interest rates down to 3 percent, and quickly. They also need to restore confidence in the prime mortgage market.
“The spread between the mortgage rate and treasury rate is exceptionally high,” he said.
Dotzour said if the treasury department guaranteed Fannie Mae and Freddie Mac bonds, the spread would be lowered from 2 percent to the more normal level of 1.5 percent.
This is the fourth rate cut since September. The Fed cut the funds rate by a half-point in September and then by smaller quarter-point moves in October and December.
Source: Real Estate Center
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