U.S. Mortgage Rates Fall to 8-Month Low

[Sonny]

U.S. Mortgage Rates Fall to 8-Month Low
By Ashwin Seshagiri - Aug 4, 2011

The rate for a 30-year fixed mortgage is the lowest since the week ended Nov. 18, when it also was 4.39 percent.
It fell earlier in November to 4.17 percent, the lowest in Freddie Mac records dating to 1971.


“It has become even clearer that the housing market will remain weak for many years.”

U.S. mortgage applications rose 7.1 percent last week, led by refinancing, according to the Mortgage Bankers Association in Washington. The group’s refinancing index climbed 7.8 percent in the period ended July 22 from the prior week.

“Refinancing activity brings folks into the market,” Gumbinger said. “That said, with an estimated 25 percent of people underwater, and 9.2 percent unemployment, a large portion of the country just can’t qualify.”

http://www.bloomberg.com/news/2011-0...n-economy.html

edit:

“Two of the most important factors that influence mortgage rates are economic growth and inflation,” said Keith Gumbinger, vice president of HSH Associates, a loan-data firm in Pompton Plains, New Jersey. “The numbers show an economy that is stumbling far worse than expected. We’re pretty close to stall speed.”

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[Ought Six]

Mortgages are super-cheap, and still nobody is buying houses. People are scared, and are not going to touch the current housing market. Welcome to our wonderful 'recovery'.

[preppiechick]

And it also doesn't help that the few people that would buy now (are they crazy??) now have seen the minimum credit score go from 650 to 725!!

[Sonny]

Mortgage rates set fresh record low,
August 18, 2011 --E. Scott Reckard

Mortgage rates tumbled to the lowest level in the history of Freddie Mac's weekly survey, with 30-year fixed-rate home loans being offered this week at an average 4.15%, down from last week's 4.32%.

Freddie Mac said in its weekly report that loans with variable interest rates also hit record lows, as did shorter-term fixed-rate loans. The 15-year fixed-rate loan, a popular choice with people refinancing their homes, was being offered at an average rate of 3.36%, down from 3.50% last week, Freddie Mac said.

The survey includes loans made with minimal payments of fees and points to lenders. The borrowers getting 30-year loans this week would have paid 0.7% of the loan amount in upfront fees and discount points, and borrowers would have paid 0.6% of the loan amount for the 15-year fixed loans, Freddie Mac said.

The rates, available to the lucky folks who have weathered the recession and housing debacle in solid financial shape, are the lowest since Freddie Mac's survey began in 1971 -- and almost as low as anyone can recall.
Long-term fixed-rate mortgages backed by the Federal Housing Administration averaged 4.08% for a several months in 1950-51, according to the National Bureau of Economic Research. FHA loans, which have additional costs, are available to people who are riskier credits than those in the Freddie Mac survey.

Long-term mortgage rates tend to track the yield on the 10-year Treasury note, which has tumbled in recent weeks as investors bailed out of the stock market and loaded up on Treasuries, seeing them as a less-scary investment option.

The Freddie Mac survey's previous low for the 30-year loan was 4.17%, recorded last November after the Fed said it would buy $600 billion in Treasury securities, creating demand that drove down the 10-year T-note's yield.

This week's drop in loan rates came on the heels of the Federal Reserve's announcement last week that it expected to keep short-term interest rates low for at least two more years because of the economy's faltering recovery.

Despite the low rates, the housing market remains sluggish. About 70% of all home-loan applications in the first half of this year were for refinancings, not home purchases, Freddie Mac economist Frank Nothaft said.

Freddie Mac surveys lenders across the nation each week from Monday through Wednesday, asking them for the combination of rates and fees they are providing on popular mortgages.

The rates are available only to borrowers with solid credit, enough verifiable income to support payments and a 20% down payment for a purchase or 20% home equity for a refinancing.

Well-qualified borrowers who shop around often obtain slightly better rates, and it's possible to lower the rates further by paying additional upfront fees known as discount points.

RELATED:
Previous record low, set in November 2010
July home sales in Southern California fall 4.5% from a year earlier
Despite record low rates, mortgage lending at slowest pace since 1997
--E. Scott Reckard

http://latimesblogs.latimes.com/mone...e-home-lo.html

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[Coyote]

And it also doesn't help that the few people that would buy now (are they crazy??) now have seen the minimum credit score go from 650 to 725!!

And that's a very good thing.

The interest rates are low to induce folks to go into debt even though debt is the problem. I would like to think it's a lesson learned by the banks and average Joe that is keeping folks away from debt.