Last week, consumers received a jolt when mortgage rates rose slightly after weeks of decline, but this week, HSH Associates is reporting declines for average combined mortgage rates. 30 year fixed rate mortgage (FRM) rates dropped from last week's 4.64 percent to 4.61 percent, while rates for 15 year FRM loans dropped by 4 basis points to 4.05 percent. Borrowers seeking very low initial rates can benefit from a 5/1 adjustable rate mortgage (ARM) loan, with this week's average combined rate dropping from 3.53 percent to 3.51 percent.
Falling mortgage rates, home values: Mixed news for buyers, homeowners
Bloomberg reports that sales of existing U.S. homes fell by 1.8 percent in September, which signals a slower than anticipated housing recovery. With mortgage rates remaining low, the combination of low home prices and mortgage rates can provide consumers ready to buy a boost in affordability.
Unfortunately, declining home values are not benefiting existing homeowners, who may find it difficult to refinance or sell their homes. First time buyers may be the winners in terms of current housing market trends, but ongoing concerns about jobs and the economy are keeping many first time buyers "on the fence."
How low can rates go isn't the only question
When planning to buy your first home, low rates are certainly beneficial, but the long term commitment of repaying a mortgage loan can impact its actual affordability. Determining how much you can afford to borrow is an important part of shopping mortgage loans and homes. Preparing for buying a home can help with qualifying for favorable mortgage rates and terms. Paying down debt, contributing to savings, and ensuring that your housing payment and other installment payments are made on time can also help with increasing your home buying and borrowing power.
Use our live database of current mortgage rates to find the best mortgage rates in your area.