We are in the fifth straight week that Long-term rates dip!

Last week, Freddie Mac’s Primary Mortgage Market Survey showed that the 30-year fixed-rate mortgage (FRM) averaged 6.48% (with an average of 0.4 points) for the week ending August 24, 2006. This average is LOWER from last week; which was at 6.52%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.14% for the same week (with an average of 0.5 points). This average is LOWER from last week when it averaged 6.18%.

One-year Treasury-indexed ARMs averaged 5.60% for the same week (with an average of 0.7 points). This average is LOWER from last week when the average was at 5.65%.

Frank Nothaft, Freddie Mac vice president and chief economist, explained “The Fed has acknowledged that it is closely monitoring the housing market as it slows down from last year’s record pace” “Although this fuels arguments about whether we will experience a soft landing or a bursting housing bubble, market watchers also perceive that it is possible that the Fed may stop raising short-term interest rates over the near term. This perception takes upward pressure off mortgage rates.”

Many are speculating that rates will continue to stabilize for the rest of the year and yet others speculate that rates might continue to rise a bit more for the end of the year. In reality nobody can predict the future but we should look at what is happening RIGHT NOW and see that interest rates have stopped rising and in some cases it has dropped enough for the consumer to take advantage and lock in good interest rates before a possible future increase. DON’T get stuck with an interest only ARM or an Option ARM loan in the hopes that rates won’t continue to rise.

August 29th, 2006 · Filed Under Keeping an Eye on the Market

Comment 

Mortgage rates have been dropping since the last weeks of July!

Last week, Freddie Mac’s Primary Mortgage Market Survey showed that the 30-year fixed-rate mortgage (FRM) averaged 6.55% (with an average of 0.4 points) for the week ending August 10, 2006. This average is LOWER from last week; which was at 6.63%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.21% for the same week (with an average of 0.4 points). This average went LOWER from last week when it averaged 6.27%.

One-year Treasury-indexed ARMs averaged 5.69% for the same week (with an average of 0.8 points). This average went UNCHANGED from last week when the average was at 5.69%.

Frank Nothaft, Freddie Mac vice president and chief economist, explained “The weaker than expected jobs report combined with the Fed’s decision to pass on raising rates at this last meeting led directly to lower rates this week” “Fed Chief Bernake, in his semi-annual speech to Congress, hinted that another rise in overnight lending rates might not be imminent and financial markets breathed a collective sight of relief,” Frank also mentioned on the previous release “Although lower rates are a welcome sight, we still feel that the 30-year fixed-rate mortgage rate will drift up and down somewhat over the next few months, but will average less than seven percent for the year.”

The present average rates have been slowly coming down from the peak they hit so far this year in week ending July 20th, back to similar averages seen back in the week ending April 27th of this same year.

As you can see, although interest rates have been rising steadily through out the year, now we might be seeing a well needed pause to the rising of interest rates. Lower rates will definitely help many homeowners with ARMs to refinance into a longer term hybrid arm or simply a fixed rate mortgage rather than waiting until later when rates may be higher.

August 17th, 2006 · Filed Under Keeping an Eye on the Market

Comment