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Current Mortgage Rates Break Record Low Again This Week--But People Still Aren't Buying

Posted by  on Oct 12, 2010
 

Lowest Mortgage Rates--Second Consecutive Record-Breaking Week

Freddie Mac's latest figures--for week ending July 1--show that the previous seven days' record lowest mortgage rates have been followed by... a new set of record lowest mortgage rates. The benchmark 30-year, fixed-rate mortgage (FRM) averaged 4.58 percent, down from 4.69 percent a week earlier. A year ago, the same figure was 5.32 percent.

Other averages include:

  • 15-year FRMs--4.04 percent
  • 5/1-year adjustable-rate mortgages (ARMs)--3.79 percent
  • 1-year ARMs--3.80 percent

Fees and points averaged 0.7 across the board.

Hello. Hello. Is There Anyone There?

Unfortunately, when it comes to buying, these amazing bargains are tempting very few people. This may well be partly because those who were keen to buy have bought already. The federal government's home buyer tax credit artificially stimulated demand, and the program's closure has left the property market with a nasty hangover.

The Mortgage Bankers Association's (MBA's) weekly survey of new mortgage applications shows that the number applying in order to buy homes during the seven days up to June 25 fell again, this time by 3.3 percent. That's close to the 13-year low.

This trend--and that reason--are reinforced by the latest information from the National Association of Realtors (NAR), published July 1. In its press release, the NAR observed:

The Pending Home Sales Index, a forward-looking indicator, dropped 30.0 percent to 77.6 based on contracts signed in May from a reading of 110.9 in April, and is 15.9 percent below May 2009 when it was 92.3. The falloff comes on the heels of three strong monthly gains as home buyers rushed to take advantage of the tax credit.

Refinancing Deals the Only Sign of Life

The one area where current mortgage rates are making a real impact is in home refinance. The MBA says that its Refinance Index jumped 12.6 percent during week ending June 25, which is a 13-month high. That's no surprise: every point that mortgage loan rates drop makes it economically sensible for many more borrowers to refinance.

Time for YOU to Refinance?

It's not hard for you to work out whether today's best mortgage rates mean that you should be refinancing now. Simply go to the ShopRate refinance mortgage calculator to see how much you'd be paying each month with current rates. Then deduct that from your existing payments, and see how long it would take you to recoup your refinancing costs.

Of course, if you're likely to move home soon, you're less likely to find the process economically viable. But, if that's the case, don't forget to check out the even better refinance rates that you can get for shorter-term mortgage loans. There's no point in paying more for a 30-year FRM if you're going to be moving in four or five years anyway.

If you find that you could benefit from a home refinance deal, you can get competitive mortgage quotes here.

Lowest Mortgage Rates--Second Consecutive Record-Breaking Week

Freddie Mac's latest figures--for week ending July 1--show that the previous seven days' record lowest mortgage rates have been followed by... a new set of record lowest mortgage rates. The benchmark 30-year, fixed-rate mortgage (FRM) averaged 4.58 percent, down from 4.69 percent a week earlier. A year ago, the same figure was 5.32 percent.

Other averages include:

  • 15-year FRMs--4.04 percent
  • 5/1-year adjustable-rate mortgages (ARMs)--3.79 percent
  • 1-year ARMs--3.80 percent

Fees and points averaged 0.7 across the board.

Hello. Hello. Is There Anyone There?

Unfortunately, when it comes to buying, these amazing bargains are tempting very few people. This may well be partly because those who were keen to buy have bought already. The federal government's home buyer tax credit artificially stimulated demand, and the program's closure has left the property market with a nasty hangover.

The Mortgage Bankers Association's (MBA's) weekly survey of new mortgage applications shows that the number applying in order to buy homes during the seven days up to June 25 fell again, this time by 3.3 percent. That's close to the 13-year low.

This trend--and that reason--are reinforced by the latest information from the National Association of Realtors (NAR), published July 1. In its press release, the NAR observed:

The Pending Home Sales Index, a forward-looking indicator, dropped 30.0 percent to 77.6 based on contracts signed in May from a reading of 110.9 in April, and is 15.9 percent below May 2009 when it was 92.3. The falloff comes on the heels of three strong monthly gains as home buyers rushed to take advantage of the tax credit.

Refinancing Deals the Only Sign of Life

The one area where current mortgage rates are making a real impact is in home refinance. The MBA says that its Refinance Index jumped 12.6 percent during week ending June 25, which is a 13-month high. That's no surprise: every point that mortgage loan rates drop makes it economically sensible for many more borrowers to refinance.

Time for YOU to Refinance?

It's not hard for you to work out whether today's best mortgage rates mean that you should be refinancing now. Simply go to the ShopRate refinance mortgage calculator to see how much you'd be paying each month with current rates. Then deduct that from your existing payments, and see how long it would take you to recoup your refinancing costs.

Of course, if you're likely to move home soon, you're less likely to find the process economically viable. But, if that's the case, don't forget to check out the even better refinance rates that you can get for shorter-term mortgage loans. There's no point in paying more for a 30-year FRM if you're going to be moving in four or five years anyway.

If you find that you could benefit from a home refinance deal, you can get competitive mortgage quotes here.

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