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Cabo San Lucas |
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Mazatlan |
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Mortgage rates continue to decline
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We are in the midst of very transitional and changing
real
estate and mortgage markets. Amongst all of the bad
news concerning these two markets, we do have some good
news concerning mortgages.
According to mortgage conglomerates Freddie Mac and Fannie
Mae, mortgage rates are continuing on their downward decline,
and mortgage activity has increased as well.
This is good news for every mortgage borrower out there,
who may be feeling some effects from the cooling market.
A September 25, 2006 article, “Mortgage rates resume
slow decline – Application volume increases,”
looks into various mortgage interest rates and figures.
Mortgage
rates have been higher than normal during the past
couple of months due to a variety of different factors.
One being that the Federal Reserve raised interest rates
a consecutive 17 times in a row in an effort to curb inflation.
It now seems that inflation is under control so the Fed
is concentrating on lowering interest rates to ease the
worry of America’s consumers and borrowers.
“After a single ‘up’ week, long term
interest rates have resumed the slow downward pattern
that began the week ending July 20.Freddie Mac's Primary
Mortgage Market Survey for the week ended September recorded
an average rate of 6.43 percent for the 30-year fixed-rate
mortgage. This is 3 basis points lower than the previous
week and the lowest level the 30 year has reached since
the week ending April 6. Points moved up from 0.4 to 0.5.
One year ago the 30-year averaged 5.74 percent.”
The 30-year fixed rate mortgage is the most traditional
and time-tested mortgage product on the market. It offers
stability and constancy for borrowers who do not like
their rates to change as they do in an adjustable-rate
mortgage, or ARM.
Both ARMs and fixed-rates offer benefits to their borrowers,
and you should contact your LEI
mortgage coach to see which would be best for you.
The 15-year fixed rate and ARMs also saw declines in their
rates recently, so whichever mortgage product you have
or are planning on taking out is probably experiencing
a decrease, meaning good news for everyone!
The 15-year fixed stood at 6.11 percent, and the average
ARM rate went from 6.14 percent to 6.10 percent.
“Frank Nothaft, Freddie Mac vice president and chief
economist said, ‘Although 30-year mortgages rates
are about three-fourths of a percentage point higher than
they were last year, it's good to keep in mind that rates
have dropped from the high of 6.80 percent reached just
eight weeks ago. And with short-term interest rate increases
seemingly on hold, for a while at least, interest rates
overall should not experience any big shifts in either
direction.’”
Mortgage activity was also fairing better this week, with
activity up 2 percent compared to last on a seasonally
adjusted basis, and 12.3 percent on an unadjusted basis.
“Refinancing activity was up sharply, representing
43.7 percent of all applications compared to 40.3 percent
the previous week. ARMs represented 17 percent of all
applications compared to 25.5 percent the previous week.”
With the lower rates abounding, and home prices decreasing
across the nation, now may be the best time to look into
making that big home
purchase. All odds seem to be in favor of the potential
buyers and borrowers. |
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