Current Mortgage Rates Set New Low--Yet Again
Current mortgage rates dipped yet again during week ending July 8, setting new lows for the third consecutive week, according to Freddie Mac's Primary Mortgage Market Survey. The national average 30-year, fixed-rate mortgage (FRM) rate was 4.57 percent, down from the previous seven days' 4.58 percent, and from the 5.20 percent recorded this time last year.
National averages for other sorts of mortgage loan include:
- 15-Year FRM--4.07 percent
- Five/One-Year Adjustable Rate Mortgage (ARM)--3.75 percent
- One-Year ARM--3.75 percent
Fees and points across the board averaged 0.7 nationally.
Refinancing Taking Off
Freddie Mac's chief economist, Frank Nothaft, said in a statement:
With mortgage rates falling to historic lows, refinance activity has been strong over the past three months. The Bureau of Economic Analysis reported that the effective mortgage rate of all loans outstanding was just below six percent in the first quarter of 2010, the lowest since the series began in 1977. Since the start of the second quarter, two out of three mortgage applications on average were for refinancing, according the Mortgage Bankers Association.
Mr. Nothaft may be right about refinance deals accounting for two-thirds of all mortgage applications over the period he specifies, but the Mortgage Bankers Association's latest figures, published July 7, show that the current spike is much higher. During week ending July 2, a full 78.7 percent of applications were refinancing ones.
Lowest Mortgage Rates Not Enough to Tempt Buyers
And that is a problem. Amidst troubling housing and economic data, such cheap mortgages are failing to stimulate demand among potential home buyers.
That is one of the reasons why senior Federal Reserve officials told the Washington Post July 8 that they are considering (but are still a long way from deciding on) new interventions that could reverse the current slowdown in economic recovery. Right now, nobody is expecting these to be on anything like the scale of those deployed during the height of the recession, but it is hoped that relatively modest steps could correct the downward trend.
One of the options being weighed is a program whereby the Fed could purchase new mortgage-backed securities (MBS) at a rate that would replace those that are dropping off its balance sheet as homeowners refinance their mortgage loans.
Compare Home Refinance Deals
If you're one of those who'd like to take advantage of current mortgage rates by refinancing, you should certainly shop around for the best home refinance deal. Compare mortgage rates here.